You may have heard me mention that I use a high interest savings account for my liquid savings.  I use this account for things like my emergency fund and other monies that I don’t need right away.  It’s used for more long term usages like property taxes or emergencies.

There are several options for high interest savings accounts.  The one I use happens to be a money market account.  There are rules for that type of account which may or may not work for you.  First of all, I am limited to six withdrawals a month.  If I withdraw more than six times, I have to pay a fee for the seventh and subsequent withdrawals.  And, it has no checks that I can write.  I have a separate checking account in the same bank that I use if I need to write a check.  I simply electronically move money from one account to the other and write a check.  I’m not going to recommend any particular bank here as rates change daily or monthly.  However, I can recommend you check out different places using a site at Bankrate.  That’s where I found my current bank years ago.

Enter your deposit amount on the site, your zip code, and the product type you’re interested in.  I recommend savings, MMAs (money market accounts) and checking.  They also have an option for CDs, but that would lock your funds up for a given period of time.  I prefer having my money as liquid as possible.  If you find something you’re interested in, be sure to read all the details of the offer.  Some may offer higher interest rates for a short period of time, then that interest rate drops.  Others may require a very high deposit for a better rate.  

Moral of the story:

Look into getting a high interest savings account.  I recommend you use it especially for your emergency fund savings and money you don’t need immediately.

So why can they offer such good rates when your local bank offer 0.10%?  Most of these banks are online with no brick and mortar buildings to support.  The one I use is about 750 miles away.  What’s the advantage of having my funds so far away?  Well, I certainly can’t go through the drive up window and withdraw cash easily.  Yes, I could through an ATM, but I don’t use those much.  Last year, they paid me over $2,000 in interest.  I won’t earn that much this year, but I’ll earn a lot more than the local bank will pay.