Sometimes even the safest mutual fund is too risky. There really is no stock or bond fund that is immune from at least some degree of volatility, and the last thing you want before putting the down payment on your new house into escrow is for you to all of a sudden have 5% less money than you though you did. That's where high yield savings accounts really come in handy. They are great places to stash cash that you don't need right away, and the best ones offer rates that can be many times higher than what you'll get in your bank's savings account. Get Rich Slowly runs down some popular options:
I did some research. I googled for “high yield savings account” and “ING direct” and “HSBC Direct“. I followed promising links (and ads) from the search results. As of March 19th, here are the offers that I was able to find with minimal digging. All of these accounts are FDIC insured.
Countrywide Bank offers a variable rate, from 4.00% to 5.40% APY, can link to other bank accounts. $1,000 minimum to open.
AmTrust Direct offers 5.36% APY, “no monthly service fee or minimum balance fees”, can link to other bank accounts. $1000 minimum. This is a money market account.
WT Direct offers 5.26% APY, no fees, can link to other bank accounts. No minimum to open, but your interest rate drops if you don’t have a $10,000 balance after 60 days.
Presidential Online Bank offers 5.25% APY, no fees, ATM access, web interface. $5,000 minimum to open.
Emigrant Direct offers 5.05% APY, no fees, can link to other bank accounts, web interface. No minimum.
E*Trade offers 5.05% APY, no fees, an automatic savings plan, can link to other bank accounts. $1 minimum to open.
HSBC Direct offers 5.05% APY (with a temporary 6.00% APY promotion), no fees, can link to other bank accounts, web interface. $1 minimum to open. The HSBC web site is a busy mess.
Capitol One offers 5.00% APY, no fees, free checks and ATM card, an automatic savings plan, can link to other bank accounts. $1 minimum to open. This is a money market account.
Citibank Direct offers 4.65% APY, no fees, $25 sign-up bonus. No minimum.
ING Direct offers 4.50% APY, no fees, an automatic savings plan, web interface. No minimum.
Sometimes even the safest mutual fund is too risky. There really is no stock or bond fund that is immune from at least some degree of volatility, and the last thing you want before putting the down payment on your new house into escrow is for you to all of a sudden have 5% less money than you though you did. That's where high yield savings accounts really come in handy. They are great places to stash cash that you don't need right away, and the best ones offer rates that can be many times higher than what you'll get in your bank's savings account. Get Rich Slowly runs down some popular options:
I did some research. I googled for “high yield savings account” and “ING direct” and “HSBC Direct“. I followed promising links (and ads) from the search results. As of March 19th, here are the offers that I was able to find with minimal digging. All of these accounts are FDIC insured.
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See also:
Ask MAX: A Good Place for Some Short-Time Money?
Ask MAX: Should I Settle for 3%?