What is the Best Savings Account?

Choosing a bank account, especially a savings account, can be a difficult decision. You have a million questions going through your mind at once. What kind of dividends are being paid out? How do the interest rates compare to other banks? Are there any hidden fees? There are a few banks that pay more interest than others, but how do these banks stack up against one another?

Interest rates on savings accounts have been at an all-time low for quite some time. In 2016, the average savings account is only gaining about .06 percent interest. Why do you even need a savings account if that is the case? Why not just put some money in a sock underneath your bed?

Well, there are a few reasons why not. One, .06 percent interest is better than nothing. Also, banks provide some security for your money. Plus, there are two accounts that you may have not taken into consideration before: Barclays and BAC Florida 12 Month CD. Both of these pay 1 percent interest or more, which is unheard of today. Barclays offer 1 percent and the BAC Florida 12 Month CD offers 1.26 percent interest.

You’re probably thinking, well, I am going to Google this BAC Florida 12 Month CD and open one right away. However, when these two accounts are stacked up against one another, you may think differently.

What is Each Bank’s Reputation?

Both Barclays and BAC Florida are both offering accounts that are $250,000 FDIC insured. This is a really big deal because, with technological terrorism on the rise, more people have the potential to gain access to your finances. B of A, Wells Fargo, Chase and other “big banks” in the United States are all insured up to $250,000. Barclays is also internationally recognized, even though they are new to the U.S.

As stated above, BAC Florida is also FDIC insured. The bank is based out of Florida, but their online services are excellent. In fact, most of the bank’s customers do their banking electronically. However, it does not have any large international standing.

Bank Monthly Minimums

Barclays is the clear winner when it comes to monthly minimums. The bank does not charge you despite the amount of money in your account. This is a huge deal. Banks like Bank of America will charge you if you have less than $300 in your savings account. The BAC Florida 12 Month CD must have a minimum balance of $1,500 to avoid a fee. That being said, if you are looking for a savings account with a high interest rate and no monthly fee, Barclays may be for you.

Savings Account Cash Availability

BAC Florida has the highest interest rate of the two, no doubt. However, there may be a few problems that arise with this account — the largest of them being you cannot access your money for 12 months after opening the account. With Barclays, you have easy access to your money.

Of course, either of these accounts will be great for long-term savings with the type of interest each is yielding. As with any financial decision, a bit of research is needed to know what is the right fit for you.

Photo: Flickr: 401(K) 2012