Watch Related Videos
comments
Savings bank accounts offer investors a great way to safely store their money with limited maintenance and hassle. Long-term savings accounts can yield a high return, but it’s up to you to find the best rate among competing banks.
Finding a High Interest Rate
Generally speaking, the more money you are able to put in your savings account, the higher your interest rate will be. Some long-term, high interest savings bank accounts have a minimum balance that you must meet to open the account. For long-term investing, you’ll want your account to have the following:
- a 12- to 36-month term
- an interest rate of at least 3.5%
- FDIC insurance
Savings Account vs CD
A certificate of deposit (CD) is another way to invest for the long-term. A CD usually offers a higher interest rate than a savings bank account, but a CD has more strict terms.
For example, if you save your money in a locked CD, you will have to pay a large fee if you ever need to withdraw money from the account. Your money is essentially “locked” in the account until the end of the term. That is why opening a savings bank account instead of a CD generally means less stress if you ever need to withdraw funds.
