Sunday, October 3, 2010

1st Step: Open a High Yield Savings Account

Ok, ok, I know "high yield" is a relative term these days with most interest rates so low, it's very hard to earn a decent amount of interest on your money. Many of you may have your savings account with your local bank just because it's easy and convenient.  However, do you know what interest rate your getting on your savings account? I bet it's less than .05% - not 5%, but .05%. That means on $1,000 you will earn an insulting $.50 on your money during the course of 1 year. You might as well stuff it under your mattress at that point.

I recommend doing a little bit more work and opening an account at an online bank, such as or Smartypig is currently paying 1.75%, so now you're going to earn $17.50 in interest on that $1000 of savings a year. It may not sound like a lot, but if you have a $5,000 savings account that's almost $100 more than you'd be getting at the local bank. You may be hesitant to put you money with an online bank, but with the ease of electronic transfers, it's very simple to transfer money into one of these accounts and you can easily transfer it back to your checking account if you need to withdraw money.  Smartypig also has a really nice goal saving feature in which you can save for specific goals, set up automatic savings withdrawals from your checking account, and even redeem your savings for gift cards to specific stores in which they pay you an added bonus of up to 12%.

My blogs will always be short and to the point if they can be. The key to saving more is keeping it simple. Too many blogs out there try to make you jump through hoops to earn some extra money or save more, not mine. I welcome discussion and comments on each posting as I start out this blog to generate more discussion on ways to save more money.

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