Savers can earn more with the right bank

The State (Sunday) - - News - BY SARAH SKID­MORE SELL

Savers re­joice – you can fi­nally earn a lit­tle more on the money you’ve been set­ting aside.

To draw in cus­tomers, banks – par­tic­u­larly on­line in­sti­tu­tions – have been get­ting more com­pet­i­tive with rates on sav­ings, CDS and even check­ing ac­counts. That means a savvy con­sumer may be able to earn far be­yond the norm if they are will­ing to shop around.

Take the hum­ble sav­ings ac­count: The av­er­age in­ter­est rate in the U.S. is 0.09 per­cent, ac­cord­ing to the FDIC. And that is just an av­er­age – some banks are of­fer­ing rates as low as 0.01 per­cent, while many oth­ers are at or above 2 per­cent.

To some­one with $5,000 sit­ting in an ac­count, that means the dif­fer­ence be­tween earn­ing 50 cents a year in in­ter­est ver­sus $100.

Af­ter the Great Re­ces­sion, banks rou­tinely paid lit­tle to noth­ing on many per­sonal ac­counts. The Fed­eral Re­serve be­gan to raise its rates in 2015, but tra­di­tional banks were slow to do the same for cus­tomers.

They had lit­tle in­cen­tive: Cus­tomers had grown com­pla­cent af­ter years of low in­ter­est rates. And tra­di­tional banks were large enough that they had huge de­posits and other busi­ness lines that served them well.

A num­ber of on­line banks spot­ted an op­por­tu­nity and be­gan of­fer­ing much higher rates to at­tract more cus­tomers. They could af­ford to be­cause they didn’t have the cost of main­tain­ing a store­front on ev­ery cor­ner.

But not hav­ing the ben­e­fit of size, they needed to of­fer at­trac­tive rates to sur­vive. Some big­ger banks took no­tice and be­gan to re­spond with higher rates.

In­ter­est rates re­main low, his­tor­i­cally speak­ing, but they are on the up­swing. Ex­perts say more banks are get­ting into the rate race, and con­sumers should take note.

Lesser-known play­ers, in­clud­ing Bank5 Con­nect, of­fer a 2.05 per­cent an­nual per­cent­age yield, or APY, on a sav­ings ac­count, but big­ger banks have some nice of­fer­ings as well. Mar­cus, the on­line bank of Gold­man Sachs, has a 2.05 per­cent rate on its sav­ings ac­count, and HSBC Di­rect of­fers a 2.01 per­cent rate.

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