Where Should You Park Your Moola? Your Options for A Small Savings Account
The time has come to open a savings account. Maybe you’re saving up for college, or perhaps you’re dreaming of a new car. But wait a minute – you don’t know your arm from your elbow when it comes to finances. You can’t drive by a bank without breaking into a sweat. So what do you do?
Here’s what this article will tell you:
Three different places to park your savings account that offer attractive interest rates. The more you earn while you save, the better.
Why something might work for you, and why it might not.
Specific companies to check out. I did some of the work for you! Save time, save your sanity.
So, without further ado, let’s get started.
Option One: Virtual Banking
Not to be confused with online banking, a digital extension of a physical bank or credit union. A virtual bank handles transactions and customer care through the Internet. Need to deposit a check? No problem – you can do that through your smartphone. Want to take money out of your savings account? All you have to do is drive to an approved ATM. No muss, no fuss.
As long as you have access to the Internet, you can do your banking. Got the urge to check your balance in the middle of a mall or McDonald’s drive-through? All it takes is a few swipes of the finger. Convenient, right?
If you need help with your savings account, it’s easy to get in touch with customer service. Send an email, make a call, or participate in a live chat. It’s completely up to you. Best of all, you’re not tied down by standard business hours.
Transactions don’t always go smoothly. If you find yourself in a complicated situation, sometimes it’s better to talk to someone in person.
You can’t forge a personal relationship with a computer screen.
Check Out: Ally Bank
Ally Bank won “Best Online Bank” two years in a row, making them a suitable place to park your savings account. With a 1.00% APY and no monthly fee to worry about, you’ll be on your way in no time.
Option Two: Credit Union
What’s the difference between a credit union and a bank? Credit unions are not-for-profit. Think of them as cooperatives with each member (customer) owning a small part of the institution.
Credit unions don’t have to answer to stockholders. Profits are used to give members lower fees and higher interest rates. How great is that?
Many credit unions are only available in certain states or communities. While you can make deposits and withdrawals at partner ATMs, actual offices will be scarce. If you plan to move, keep this in mind.
Regular banks serve the general public, but credit unions have requirements for membership.
Check Out: Alliant Credit Union
If you’re looking for a credit union that accepts members from across the country, Alliant Credit Union could be right up your alley. If you don’t work or live in the Chicago area, all you have to do is donate $10 to Foster Care to Success and you’ll be eligible for membership. Savings accounts with balances of $100 or more receive a 1.00% APY.
Option Three: Peer-to-Peer Lending
Peer-to-peer lending is exactly what it sounds like. Also known as P2P lending, it involves ordinary people, the Internet, and the exchange of money.
When you loan money, you receive interest each time the borrower makes monthly payments. This is a passive way to earn income that you can add to your savings.
It’s always possible that your loan won’t be repaid. Should that happen, you might have to take a loss.
Check Out: Lending Club
Lending Club is one of the most well-known P2P lending websites. You can check your investor account and withdraw your earnings (or reinvest them) whenever you please. They offer a projected annual return of 5.20% to 8.19%.
Remember, you can do this!
Learn more about Megan at http://MeganWritesItDown.com
The views and opinions expressed herein are not necessarily those of FinancialHelpDesk.com or Casey Fleming.