I am looking to transfer my savings from my normal savings account (0.05% interest, linked with my checking account) to a high-interest savings account (1.00% or higher). It seems too good to be true that just changing where I store my money could earn me 20x more in interest per year than what I use now.

So far the only disadvantage I see is the inconvenience of not having my checking and savings accounts with the same financial institution. However, I have checked with my bank, and I will be able to transfer to/from my external accounts free of charge, so that makes things much easier.

What are your thoughts? Have you made this decision/done this research before?

What are your opinions/recommendations?

Here are some sites I found with some good information:
http://www.getrichslowly.org/blog/2007/03/21/which-online-high-yield-savings-account-is-best/
http://www.moolanomy.com/1333/how-to-find-best-high-yield-savings-interest-rate/
http://www.money-rates.com/savings.htm

I personally like ING Direct (1.00%, no min balance, no monthly fees, trusted name). I also like Sallie Mae since it has daily compounded interest and I already have an account with them. There are other options, too, but those are my early favorites.

What are some things I should look out for and consider in making this decision? I'm not a finance expert, so any help I can get would be great. Thanks!

I am not a financial expert, but here is a link to a program in Ohio that can get you 3.25% interest on your savings every other year.

http://www.tos.ohio.gov/ForYou/Default.aspx?Section=SaveNow&SubSection=SaveNOW%20FAQ

I use ING, and would recommend it.

Why not invest it? Chance are you'll make more than a 1% gain a year. I only keep a grand in my savings. Put your money to some real work!

sleeper;749664 wrote:I use ING, and would recommend it.

Same here. When I started using ING it was getting almost 5% interest. It sucks how much that has dropped.

justincredible;749677 wrote:Same here. When I started using ING it was getting almost 5% interest. It sucks how much that has dropped.

Yeah, the spread is killing people. For a while you could get a 4% HELOC and a 6% CD and make 2% per year on your home's equity. Then of course the people who bought inflated houses started doing that, and well you know the rest. But rich people who had paid off houses (esp retired or semi retired people) used to do this all the time.

Are we looking for a standard savings account?

FatHobbit;749542 wrote:I am not a financial expert, but here is a link to a program in Ohio that can get you 3.25% interest on your savings every other year.

http://www.tos.ohio.gov/ForYou/Default.aspx?Section=SaveNow&SubSection=SaveNOW%20FAQ

Has only a 5000 dollar max amount thats about 162 dollars in interest over a year.

Pick6;749668 wrote:Why not invest it? Chance are you'll make more than a 1% gain a year. I only keep a grand in my savings. Put your money to some real work!

This. I made 10% in less than 2 months off a $2,000 investment in one stock. The market, right now, is better than any savings account (as long as you are willing to do your homework and take on some risk).

The whole value of my scottrade account went up 2 1/2%...just today.

dwccrew;750343 wrote:The market, right now, is better than any savings account (as long as you are willing to do your homework and take on some risk).

The risk is my biggest problem. I have some money to play around with but I am too risk averse to throw it into the market. Even while watching the market go up and my 401k having a much higher return than my savings account. Another problem is that because of my employer there are many Companies I can't invest in anyway.

The thing with these type of accounts is that they are frequently "teaser" rates that will adjust way down after 6 months or so. It's designed to acquire customers. So read the fine print and keep an eye on it and be prepared to close that account and open a different one in 6-12 months. Usually not a big deal as some of the larger banks just offer a different type of savings account and you can just do the close/open/transfer online.

I almost put a good chunk of money into stocks a little bit ago but have some life decisions possibly coming up (maybe a wedding, etc.) so didn't want to pay $70 (5 stock purchases, 5 stock sells @ $7ea) by putting money in and taking it shortly thereafter. I have savings that I don't want to tie up too much like in a CD or stocks, so just a savings account that is easily accessible with no withdrawal limitations and a 20x higher interest rate than my normal savings account is what I'm looking for right now at this point in my life. I already have a good 401k with my employer, so that and my Roth IRA are my retirement funds. I'm just talking my 6-month savings that I always want accessible to transfer to/from my checking, etc.

The last few years demonstrate that many people would be well-served by keeping a liquid emergency fund of 6 months or so of expenses. Beyond that, invest it.