The calendar may say July, but the climate for savers has definitely cooled down. Last summer, yields of 5% or more were plentiful. Now, rates of 3% to 3.5% are common.
But don't despair. Savings and checking accounts at online-only banks, such as HSBC Direct, ING Direct and Salem Five Direct, charge no fees and require no minimum deposits or balances.
| Row 0 - Cell 0 | Search Savings & Checking Rates |
| Row 1 - Cell 0 | Compare CD Rates |
| Row 2 - Cell 0 | CD Rate Predictions |
To qualify for the best rates, however, you may have to accept some restrictions or meet certain conditions. For example, the Woo Hoo checking account at Citizens Bank in Minnesota pays 6% on deposits up to $25,000 if you use your debit card at least ten times a month, make one direct deposit or automatic payment each month, and receive your statements electronically. Coastal Commerce Bank, Newport Fed and Dade County Federal Credit Unionoffer similar accounts. Make sure these requirements mesh with your banking style before you open an account; if you fail to meet the conditions, you could earn as little as 0.1%.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Bank money-market deposit accounts, which are insured by the FDIC, offer some of the best rates; the only catch is that you are usually limited to six withdrawals a month. For example, if you have at least $1,000 in an Indymac Bank E-Money Market account, you'll receive an annual yield of 4%. If that threshold is too high, Flagstar Bank has no minimum-balance requirement and is offering a rate of 3.7%. Twelve banks recently had money-market funds with yields of 3% or more, according to Bankrate).
If you can afford to lock up a little cash (or a lot) for a set time, FDIC-insured certificates of deposit are another good option. Stash $5,000 or more for five years in a Capital One Bank CD and you'll earn 4.8%. At GMAC Bank, you can deposit as little as $500 and earn 4.4% interest. If you need the cash sooner, a one-year, $5,000 CD from Indymac Bank is earning 4.2%; a one-year CD from GMAC Bank is earning 4.1%, again with a $500 minimum. Even if you can spare the cash for only six months, you can earn 3.8% at Corus Bank ($10,000 minimum) or 3.7% at Nexity Bank($1,000 minimum).
Yields on money-market mutual funds have dropped dramatically; avoid them unless you need immediate access to your funds. Dreyfus BASIC, the highest-yielding fund, offers a rate of only 2%; the average money-market fund is yielding barely 1%.
-
Nasdaq Sinks 418 Points as Tech Chills: Stock Market TodayInvestors, traders and speculators are growing cooler to the AI revolution as winter approaches.
-
23 Last-Minute Gifts That Still Arrive Before ChristmasScrambling to cross those last few names off your list? Here are 23 last-minute gifts that you can still get in time for Christmas.
-
The Rule of Compounding: Why Time Is an Investor's Best FriendDescribed as both a "miracle" and a "wonder," compound interest is simply a function of time.
-
Amazon Resale: Where Amazon Prime Returns Become Your Online BargainsFeature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
What Does Medicare Not Cover? Eight Things You Should KnowMedicare Part A and Part B leave gaps in your healthcare coverage. But Medicare Advantage has problems, too.
-
15 Reasons You'll Regret an RV in RetirementMaking Your Money Last Here's why you might regret an RV in retirement. RV-savvy retirees talk about the downsides of spending retirement in a motorhome, travel trailer, fifth wheel, or other recreational vehicle.
-
Roth IRA Contribution Limits for 2026Roth IRAs Roth IRAs allow you to save for retirement with after-tax dollars while you're working, and then withdraw those contributions and earnings tax-free when you retire. Here's a look at 2026 limits and income-based phaseouts.
-
Four Tips for Renting Out Your Home on Airbnbreal estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to a Cheap Last-Minute VacationTravel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
-
How Much Life Insurance Do You Need?insurance When assessing how much life insurance you need, take a systematic approach instead of relying on rules of thumb.
-
When Does Amazon Prime Day End in October? Everything We Know, Plus the Best Deals on Samsonite, Samsung and MoreAmazon Prime The Amazon Prime Big Deal Days sale ends soon. Here are the key details you need to know, plus some of our favorite deals members can shop before it's over.
