Do You Have a Savings Account?

Well do you? I'm hoping your answer to that question is NO. That's right - I hope you said NO because if you said YES, you're money is atrophying away. Take a look here. What this shows you is that a typical Savings account offered by your standard retail bank (Bank of America, Wachovia, BB&T, whatever) pays an interest rate of.....wait.....wait....0.35%

Holy cow - that's unbelievably terrible. That means that if you give them $1000, they give you $3.50 in a year's time. And that's before you pay tax on your gains! My advice to you is to get your money out of that kind of Savings account immediately. Otherwise you're losing money every day because inflation is AT LEAST 3% per year (which means you better be earning more than 3% on your money or you're losing value rather than gaining it!).

But, you say, where shall I go for better returns and higher levels of satisfaction? Take heed dear friend. I'm here to help you. Look HERE. What this list shows you is the institutions offering Money Market High Yield accounts. The difference between a Savings account and a Money Market account is minimal and equates to basically one key thing:

• Savings accounts are usually a little more liquid - you can move money into your checking account online in real time whereas in a Money Market account it takes about 3 days for money to go from your checking account to the Money Market and about 3 days for you to get your money back out

That's it. Otherwise, they're both places to store your money. Except one grows your money (Money Markets) and one withers your money away (Savings accounts).

So - look at that list of institutions offering Money Market accounts, choose one with a 4-star rating (shown under the bank name), make sure there are no fees or minimum balances, and surf on over to the bank's website to get the account opening process started. I've got 3 different online Money Market accounts that I move money between depending on which is currently paying the highest interest rate. Mine are at ING Direct, Emmigrant Direct, and HSBC Direct. I can vouch for all three of them.

One last thing to keep in mind before you start following my sage advice and moving money around. Keep in mind that FDIC insurance (the government) protects deposits up to $100,000. That means that if a bank goes belly up (like NetBank recently did), you're money in a deposit account is protected up to that amount. So - long story short - don't put more than $100K in any single account or some of your money won't be covered by the FDIC insurance.

Now - get your money moving!