High Interest Bank Accounts

There are many reasons to look for high interest bank accounts. Here are just a few.

The recent global recession drove giant corporations to bankruptcy, caused many small to medium businesses to close shop, rendered millions of workers jobless for extended periods of time, and triggered widespread home foreclosures.

As the badly hit “victims” try to put their shattered lives back together, they try to find sources of backup income to augment what they get from their new jobs or startup businesses. One source that they are currently considering is high interest bank accounts.

People observe that “high” interest is not what used to be. For example, if during the good old times high interest bank accounts were in the vicinity of, say, 5% to 6%, at present they are at levels below 2%. But this has not discouraged people from regarding bank accounts as good sources of supplemental income. “Every little bit helps” seems to be the philosophy of the times.

Where does everyone look for bank accounts that can offer interest rates that are a notch higher than what’s usually available? They set their sights on online banking.

Compared with traditional banks (the ones you see in your neighborhood street corners), online banks can offer more attractive interest rates because business conducted online entails far less overhead cost than its non-online counterpart. For this reason, they can offer high interest bank accounts.

The first logical step in the quest for high interest bank accounts is to search the Web for online banks using Google. This effort will never be wasted because the Internet is replete with an amazing array of sites that offer online banking services.

Once you see the list of online banks in search result pages, click their links one by one and read the information they post on their pages. Virtually all online banks publish the rates they offer for their deposit account services: money market account, CD (certificate of deposit), savings account.

Even online current accounts now pay interest to depositors. In traditional banking, current accounts have always been non-interest-bearing.

If you know how to use software like Microsoft Excel or OpenOffice Calc, plot the information you find on the Web into the spreadsheet. Make column headings for the name of bank and the names of high interest bank accounts. Next, fill in the rows below the headings with the corresponding Web data.

After an hour or so, you should have enough data on your spreadsheet that you can use for comparison. Select one or more banks that offer rates that are clearly much higher than their competitors’.

Go to the websites of the online banks you have short-listed and check out the conditions you should satisfy in order to qualify for specific types of account that you are interested in. These conditions typically touch on the amount of deposit to maintain, the length of time you lock in your funds, and withdrawal restrictions.

If you find the conditions easy to comply with, then apply for your high interest bank accounts! If your application is approved, congratulations! You’ve reached your goal.