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3 great reasons to open an online savings account this month
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Persistent inflation has led to elevated interest rates over the last two years. Although that means borrowing has been more expensive, saving has become more profitable. High-yield savings accounts, for example, currently come with annual percentage yields (APYs) up to about 5.50%.
With inflation currently sitting at 3.5% per year, moving money into a high-yield savings account can help you keep up and earn a little extra. But which institutions are offering the highest net returns? In many cases, it’s online banks.
Compare the top rates you can earn on your savings today.
3 great reasons to open an online savings account this month
Online banks offer some of the most competitive high-yield savings accounts on the market — combining higher returns with the flexibility and security you expect from a savings account. Here are a few good reasons why you may want to open one this month.
Higher APYs
When looking at traditional savings accounts nationwide, the average APY sits at just 0.46% as of April 2024. Returns in that ballpark don’t come close to helping you keep up with inflation. In turn, they won’t be the best place to keep your savings.
Many online banks, on the other hand, are offering rates from 4% to 5% or higher. They often have less overhead than brick-and-mortar banks and aren’t as popular. As a result, they try to earn the attention and business of customers by offering accounts with higher APYs, fewer requirements and lower fees.
On the downside, if you like to be able to walk into a bank and talk to a person about your accounts, that won’t be an option with an online bank.
“What you give up in personal connection and communication, you can gain in rate of return and accessibility,” says Ryan Moore, financial advisor at TBS Retirement Planning.
Learn more about your online high-yield savings account options here.
Flexibility
Online high-yield savings accounts also provide the same flexibility as traditional savings accounts, which other interest-yielding accounts like CDs lack. You’re not required to leave your money in the account for any set amount of time.
That said, some banks restrict the number of transfers you can make from your savings account each month, so be sure to understand all of the restrictions and requirements before opening one.
Security
Another benefit of online savings accounts is that they come with very little risk. Your APY can drop because the rates are variable on these accounts, causing you to earn less, but you’re not going to lose the money you’ve deposited or the interest you’ve earned.
And, as long as you choose an FDIC-insured bank or NCUA-insured credit union, up to $250,000 per account, per depositor, will be safe — even if the institution goes bankrupt.
“Some people who have always banked with a local branch with a physical presence may be uncomfortable with the idea of switching to an online-only bank. But so long as the online bank is FDIC-insured, your funds will be every bit as safe as they are with a traditional bank,” says Todd Stearn, founder and chief executive officer of the Money Manual.
Take advantage of high savings account APYs while you can
Online high-yield savings accounts are worth considering in all economic environments but are especially attractive right now due to the higher-than-usual rates. However, that may change later this year as the Fed has forecasted rate cuts.
If you’d like to take advantage of the elevated rates while you still can, shop around and compare savings accounts based on the following factors:
- APYs: The amount you’ll earn per year on your account balance.
- Minimum deposit requirements: The amount you have to deposit to open the account and earn the APY.
- Minimum balance requirements: The amount you have to keep in the account to earn the APY.
- Fees: Amounts you pay for owning the account and/or using certain aspects of it.
“There can be many fees that a bank may charge that can add up,” says Kendall Meade, financial planner at SoFi.
For example, fees for overdrafts, ATM use, not maintaining a minimum required balance and more. Meade says that too many fees can end up negating the benefits of a high APY.
The bottom line
On a final note, a savings account should only be one part of a larger financial plan. They’re great for housing emergency funds and savings for short-term goals but you’ll also want to other accounts in place. For example, a high-yield checking account is better for holding money you’ll use within a month’s time, while a 401(k) or IRA is better for retirement savings.
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McDonald’s investing $100 million to lure customers back to the fast food giant after E. coli outbreak
McDonald’s is investing $100 million to bring customers back to stores after an outbreak of E. coli food poisoning tied to onions on the fast-food giant’s Quarter Pounder hamburgers.
The investments include $65 million that will go directly to the hardest-hit franchises, the company said.
The U.S. Centers for Disease Control and Prevention has said that slivered onions on the Quarter Pounders were the likely source of the E. coli. Taylor Farms in California recalled onions potentially linked to the outbreak.
The E. coli outbreak has sickened 104 people in 14 states, federal health officials said in an update on Wednesday.
At least 34 people have been hospitalized, and four developed hemolytic uremic syndrome (HUS), a serious condition that can cause kidney failure. An 88-year-old man who resided in Grand Junction, Colorado, died, as previously reported. The illnesses began at the end of September, and the most recent onset of illness occurred as of Oct. 21, according to the U.S. Food and Drug Administration.
The Food and Drug Administration has said that “there does not appear to be a continued food safety concern related to this outbreak at McDonald’s restaurants.”
However, the outbreak hurt the company’s sales.
Quarter Pounders were removed from menus in several states in the early days of the outbreak.
In a statement Wednesday obtained by CBS News, McDonald’s said it had found an “alternate supplier” for the approximately 900 restaurants that had temporarily stopped serving Quarter Pounders with slivered onions.
“Over the past week, these restaurants resumed the sale of Quarter Pounder burgers with slivered onions,” McDonald’s said.
CBS News reached out to McDonald’s on Saturday for a statement regarding the reported investment.
Health officials said Saturday they have confirmed the first U.S. case of a new form of mpox that was first seen in eastern Congo.
The person had traveled to eastern Africa and was treated in Northern California upon return, according to the California Department of Public Health. Symptoms are improving and the risk to the public is low.
Mpox is a rare disease caused by infection with a virus that’s in the same family as the one that causes smallpox. It is endemic in parts of Africa, where people have been infected through bites from rodents or small animals.
Earlier this year, scientists reported the emergence of a new form of mpox in Africa that was spread through close contact including through sex.
More than 3,100 confirmed cases have been reported just since late September, according to the World Health Organization. The vast majority of them have been in three African countries – Burundi, Uganda, and the Democratic Republic of the Congo.
Since then, cases of travelers with the new mpox form have been reported in Germany, India, Kenya, Sweden, Thailand, Zimbabwe, and the United Kingdom.
Health officials earlier this month said the situation in Congo appears to be stabilizing. The Africa Centers for Disease Control and Prevention has estimated Congo needs at least 3 million mpox vaccines to stop the spread, and another 7 million vaccines for the rest of Africa.
The current outbreak is different from the 2022 global outbreak of mpox where gay and bisexual men made up the vast majority of cases.