Higher-Paying Banks Are Easier to Contact, Earn Youy More Money
Higher-Paying Banks Are Easier to Contact,
Earn Youy More Money
by Robert K. Heady
Bank Rate Monitor
How
smart a shopper are youreallywhen it comes to earning top dollar from your
bank investments?
Do
you roll over, play dead and let the bank walk all over you with low savings
rates, just because they smile when you walk into their lobby?
Or
are you wise enough to double, triple or even tentuple your money by simply
contacting a different FDIC-insured institution that will beat the pants
off what your present outfit is paying?
That's
no pipe dream. Consumers are losing billions of dollars a year by parking
their cash in low-yielding banks, when, if they just took a few extra minutes
to do their homework, they could easily fatten their wallets. The trick
is to shop two ways:
Example:
Floridians earn anywhere from a piddling 0.50 percent to 5.17 percent on
their Money Market Accounts, depending on the institution, while the average
outfit in the state pays 2.23 percent, according to bankrate.com. On a $10,000
investment, that amounts to a difference of $467 per year in interest!
But
if the same customer deposited his or her $10K in the highest-yielding MMA
in the country, 5.20 percent at USAccess Bank in Louisville, KY (877-369-2265),
they'd even earn 20 bucks more than the top-paying Florida institution was
offering.
You
can find the best deals in Money Magazine, Your Money Magazine,
The New York Times and dozens of other newspapers, and on at least
three Web sites: www.bankrate.com, www.ibcdata.com and www.banx.com.
The
out-of-kilter rate situation is just as bad in other markets. New York State
institutions typically offer 1.41 percent on interest checking, but there
are places in New York City that pay 3.15 percent, while at least one Buffalo
bank, Fleet National, dangles a paltry 0.60 percent. In Philadelphia, interest
on checking even goes as low as 0.20 percent, believe it or not.
Who
falls for those losers? Beats me.
If
you buy a six month CD in Georgia, the yield will be anywhere from 3.90
to 5.35 percent, with the higher figure being at Net.Bank in Alpharetta
(888-256-6932). Assuming you roll the account over for another six months,
your $10,000 will earn $535 in one year, or $140 more than the worst deal
in the state.
You'll
get extra goodies and freebies if you open your high-yielding account over
the Internet. There's a $50 bonus with your MMA or CD from Providian Financial,
a consistent high yielder with offices in San Francisco, Salt Lake City
and Tilton, NH (www.providian.com). Commerce Bank, Philadelphia (www2.yesbank.com)
gives you a free digital phone and a $10 savings credit if you open an account
with at least $250. Net.Bank in Georgia (www.netbank.com) offers a free
checking account yielding 3.05 percent with a $100 minimum balance requirement
and no monthly fee.
Indeed,
the high-yield business is booming, says Tim Smallow director of deposits
for Providian Financial, whose MMA pays 5.01 percent. "Our volume in
CDs and Money Market Accounts tripled between January and March, with 2-1/2-
and 5-year CDs still the most popular choice. About three-quarters of our
customers invest in CDs, the rest in MMAs."
(Tip:
When you study high-yield rate tables surveyed by different research services,
check the data carefully and always confirm it with the bank. Recently,
of 13 top-paying banks on one company's rate table, only 2 of the 13 appeared
on another firm's survey, which was conducted the same day, and 2 others
showed different yields on the same CD account.)
Contacting
the highest-yielding outfits is easy. You call the bank on its toll-free
number and ask for the person in charge of consumer deposits. Some institutions
have a "national desk" to handle out-of-state transactions. Explain
how much you have to invest and for how long. Ask for the rate and yield
and for how long they are good (rates can change daily or weekly).
Are
there even higher yields for larger deposits? Or lower yieldsor no interest
at allif your balance slips below a certain level? What are the fees and
charges? Don't be afraid to negotiate a higher rate or lower fees, because
today banks aren't afraid to quietly wheel and deal.
When
will your interest earnings begin, and after how long may you withdraw funds
from a Money Market Account? Request a set of account-opening documents
(when you transmit funds, be sure to put your Social Security number on
your check or money order).
Editor's
Note: Robert K. Heady is the founding
publisher of Bank Rate Monitor and is the co-author of the book,
The Complete Idiot's Guide to Managing Your Money. You can write
to him in care of the Bull & Bear or send e-mail to jrnl8888@aol.com.
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