Online Savings Account Bank Choice

An online savings account is a great way to store your money. However, there are many different options, plans, and perks. Trying to wade through an endless search of IRAs, CDs, home mortgages, student loans and other financial services is a tough task. I will break down a list of viable online savings accounts. Many of these options are with incredibly reputable banks with full FDIC insurance. There are other options that could also garner good interest. An individual who is interested in earning interest on savings could look to invest their money in a number of alternatives. There are micro financing options such as Kiva.org that allow a lender to actually connect with a struggling entrepreneur and there financial needs.

Here is the real scoop.  It doesn't matter which type of savings account you really choose.  Some have great benefits that can get you points to redeem for hotels, car rentals and cheap flights.  But, there is also a terrible return on your investment.  You must always take into account that there is on average about 3% of inflation every year.  Which in essence means, you are losing purchasing power.  Sometimes we see annual increase in pay to offset this, however in the recent financial downturn many companies were unable to offset rising cost their employees face.  So, with today's rates as low as they are, you are actually losing money or purchasing power by placing your money in a savings account.  However, with your money safely in a savings account you won't lose it, it won't get stolen, and you access it fairly easily.  Is this benefit worth losing 1-2% while rates are so low?  If you answered no, then you should obviously look to invest elsewhere.   

Consumer Price Index (CPI)

Federal Funds Rate

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