Originally Posted by ROCSteady
What would you say is a high interest rate for a separate savings account?
1.5-2.5% at the moment looks to be the best at the moment.Make sure there are no hang ups or fish hooks that could screw you. The one I'm in is 2.0% while another one was 3.0% but I'd have to give a 60 day notice to with draw the money. Not a good idea for an emergency fund you may need access to ASAP.
For example, take a look at the very first one Goldman Sachs Marcus. No fees. No minimum balance but you can only make a maximum of six transfers a month. Remember - this would be your emergency fund so you may not need to make the six transfers. It may not be a good idea for your long term holiday savings account but would make sense for your emergency fund.
It's not "that" much money to be honest but it's better than sitting in a checking account getting 0.00%. Convert the 2.0% into actual cash dollars instead of looking at the percentage. 2.0% on $10,000 of savings is $200.00. It's not gonna make you rich but that's maybe the cost of three car insurance payments? Or a monthly health insurance payment?
After emergency fund saving for awhile, you can start putting that emergency fund into some CD's to get a better interest rate.
I already have about six months of emergency funds so I'm planning to put three months worth of savings into a three month CD...if I need it well, I'll have my three months of liquid savings available to me and once they expire I can access the savings I put in a CD plus the extra interest I earned on it. If I continue to not need it, I'll keep reinvesting that three month CD over and over again.
A CD is a "certificate of deposit" if you don't know what it is. Your bank may have them but other banks and brokers have them as well. Look for the best rate.