Tired Of Puny Bank Rates? Here’s How To Fight Back

magnifying glass

You’ll need a magnifying glass to spot the puny interest you earn on a bank deposit, given today’s rock-bottom interest rates.

Hard to believe, but at many banks a $100,000+ deposit can earn you less than $20 a month in interest.

Who ever thought that interest rates could sink so low?

Many of our clients, just like fellow investors across the country, are on the lookout for a decent return on their cash investments. That “decent return” can sure be hard to find.

Last week, a client called for suggestions on how to handle a $100,000+ Certificate of Deposit coming due at her local bank. The bank was paying peanuts on new deposits, prompting her to seek a better deal elsewhere (she did want to keep the funds fairly liquid as part of her emergency reserves).

We shopped around for her, starting first at bankrate.com. Bankrate is a good place to start your search when you’re looking for the most competitive bank rates and deals.

The best rates tend to be offered by online banks. Rest assured, these online banks benefit from the same FDIC deposit protection as brick-and-mortar banks, and it’s a quick and easy process to move funds electronically between an online bank and your local checking account.

If you haven’t already taken a look at bankrate.com, do so. You’ll usually find an online or brick-and-mortar bank that pays more interest than your local institution or even your credit union. Of course, it’s not worth the aggravation changing your bank for a simple checking or savings account, but when bigger deposits are involved (like in the case of our client) it definitely makes sense to shop around.

In our case, persistence paid off.

We found an impressive 1.36% money market rate for our client at a local brick-and-mortar bank (we actually stumbled across the rate offer, not online, but through an ad we received through the mail. Go figure.) That rate is guaranteed for an entire year, no strings attached, with full FDIC protection. All our client had to do was drive the five or ten minutes to the bank branch and hand over her deposit.

It sure beats the puny rate deal she was offered at the previous bank, and will earn her $2,000 more each year than depositing the cash in a brokerage account.

Not bad for a few minutes work.

About Mari Adam

Mari Adam, Certified Financial Planner™ and President of Adam Financial Associates Inc, has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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