What kind of interest rates can we expect from a good savings account?
When you're evaluating savings options, you want to consider three things: interest rate, convenience, and whether or not you'll be able to withdraw your money when you need it (and at what cost). It's a little hard to satisfy all of these requirements at once, so weigh what's most important to you. If the focus is on getting the best interest rate, go to bankrate.com to compare rates on money market accounts and one-year CDs. Sometimes CD rates are better than money markets, and sometimes the opposite is true; but looking into the current rates will let you compare your options. In general, you'll find better rates on both using an e-bank or online account. Why is that better than the bank around the block? Because online banks don't have an expensive brick-and-mortar presence on every corner and can afford to pay you better rates on your savings -- 4 percent, 5 percent, and sometimes more these days. Just be aware that if you go with a CD, you'll pay a penalty if you have to pull out your money before the certificate comes due.
>> More Money Q&A with Jean Chatzky
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Jean Chatzky is a money coach and the financial editor for the Today show. She is the the author of of five books including the upcoming Make Money Not Excuses: Wake Up, Take Charge and Overcome Your Financial Fears Forever.
>> Buy it now
>> Check out her website, jeanchatzky.com
by The Nest Editors
7/1/08
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