Advertisement
CD rates

Bank Accounts Paying Up to 4% Interest

There are payoffs for storing your money in an online bank—but more rules, too.

Even with the Fed swinging into action, savings rates remain minuscule, averaging just 0.16%. Yet some banks offer you much more—as much as 4%—if you follow certain rules.

Advertisement - Article continues below

Online-only banks usually pay more than branch-based institutions. For example, Incredible Bank, which exists only in the virtual world, pays 1.2% on savings deposits from $2,500 to $250,000. But there’s a catch: Depositors who exceed six withdrawals or other types of transactions per month start to rack up fees.

For a 4.6% yield on up to $20,000, consider opening a rewards checking account at Consumers Credit Union, based in Gurnee, Ill. Rules include spending at least $1,000 a month on a CCU credit card, conducting 12 or more debit card transactions each month, and doing some banking online. Anyone can join the credit union for a one-time fee of $5.

Rates on most CDs can’t beat high-yield checking accounts. But CDs can make sense if you “ladder them up,” says Greg McBride, chief financial analyst at Bankrate.com. Take, say, $10,000 and split it into five $2,000 chunks, buying CDs maturing in one, two, three, four and five years. As each certificate matures, buy another five-year CD with the proceeds. If interest rates increase, you can take advantage of higher yields. “The landscape for savers won’t improve dramatically in the near term,” says McBride, but rates could be higher in a year or two. One good option now: a five-year CD from First Internet Bank of Indiana, yielding 2.1%. To find more deals, go to www.depositaccounts.com or www.bankrate.com. (Returns are as of March 31.)

Next: Municipal Bonds to Earn 1% - 3%

Advertisement

Most Popular

65 Best Dividend Stocks You Can Count On
stocks

65 Best Dividend Stocks You Can Count On

These 65 Dividend Aristocrats are an elite group of dividend stocks that have reliably increased their annual payouts every year for at least a quarte…
July 8, 2020
8 Ways You Might Be Cheating on Your Taxes
taxes

8 Ways You Might Be Cheating on Your Taxes

Don't fall into these common traps that can get you in hot water with the IRS.
July 8, 2020
Find a Great Place to Retire
happy retirement

Find a Great Place to Retire

Our cities provide plenty of space to spread out without skimping on health care or other amenities.
July 2, 2020

Recommended

If You're Using Cash Less Often, You're Part of a Trend
Technology

If You're Using Cash Less Often, You're Part of a Trend

The pandemic is speeding up the use of digital payments.
July 2, 2020
The Best Bank Accounts for You
banking

The Best Bank Accounts for You

Kiplinger's contributing editor Lisa Gerstner joins our Your Money's Worth podcast to unveil the best banks for all kinds of savers. Also, our hosts R…
June 30, 2020
The Best Bank for You, 2020
banking

The Best Bank for You, 2020

We've identified the banks and credit unions that offer the best combination of high rates, low fees and a customer-friendly focus.
June 25, 2020
Check Your Financial Adviser Now (and Every Year) or Regret It Later
wealth management

Check Your Financial Adviser Now (and Every Year) or Regret It Later

Fewer than 10% of investors use free background checks like Investor.gov, BrokerCheck or IAPD to check their financial advisers’ backgrounds. These on…
June 23, 2020