The past several years have been dismal for savers. Many banks are paying just $1 of interest per year per $1,000 deposited.
Is it worth shopping around for higher rates? It depends a lot on how much you have socked away in savings, and how little interest your bank is paying. I searched the web to find 10 banks offering 12-month CD rates of 1.0% or better as of 10/19/15:
ELoan – 1.30% with a $5,000 minimum deposit.
CIT Bank – 1.30% with a minimum $1,000 deposit. The bank also has a high yield savings account paying 1.05%.
Synchrony Bank – 1.25% APY with a balance of $2,000 or more. The bank also offers a high yield savings account paying 1.05%.
Sallie Mae – 1.25% with a $2,500 minimum. This is the student loan group.
BankDirect – 1.21% on a $10,000 minimum deposit. BankDirect is a division of Texas Capital Bank.
Discover – 1.15%. They don’t just offer credit cards!
Ally Bank – 1.05% APY. If you think rates are going to go up sooner or you might need to pull your cash, Ally also has a No Penalty 11 month CD with a 0.87% APY.
Nationwide – 1.05%. Bumps to 1.10% with $100,000 or more.
FirstIB – 1.0% with a $1,000 minimum.
GE Capital Bank – 1.0%.
Now that I’ve done the homework for you, does it make sense to lock your money up for a year at these rates? I think it depends on the delta between the CD rate and your savings rate. At such low rates, you literally need to consider your time when it comes to opening a CD. Is it worth spending an hour opening an account, and a bit of extra time to handle the taxes, that will earn you an extra $200 a year before tax?
That’s your call.
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