They want your money, whether it’s saving or spending, but they don’t make it easy for you. An instant access savings account can be a rare bird to locate and often if you don’t live in the area where the bank or savings institution is based, you might not even qualify to open an account.

The best option may be an internet based account. Although not strictly speaking instant access, since you won’t have immediate access to the cash as you would from an ATM or bank teller, you can make a few withdrawals each billing cycle, free of charge, which, once the cash is transferred into your checking account, you can withdraw at will.

Make sure your bank or savings institution is FDIC insured, that protects your savings whatever happens to the bank up to a limit of $250,000 per person per account. A couple, for example, would have a secure limit of $500,000 on their savings.

One bank offering a useful online service is SFGI, a subsidiary of Summit Community Bank. You can either link the online account to another checking account with Summit Community Bank or you may choose one other external account at another bank or savings institution. Two days is the average transfer time so although not as instant as an ATM machine, the delay can still be easy to manage. This account starts with a minimum deposit of $500 up to a $25,000 maximum. The annual percentage yield is 1.16% and the minimum balance required to keep the account open and earning once you have made the initial deposit is only $1.

If you live in Ohio, Kentucky or Indiana and have a checking account with them, Union Savings Bank will enable you to open an online savings account. Check out one of their 25 branches in Cincinnati, Dayton, Columbus, Ohio, Kentucky and Indianapolis.

Credit Unions can also be useful places to deposit your instant access cash. First Light Federal Credit Union, based in the El Paso – Las Cruces area, gives you instant access to your savings using a Personal Access Line touchtone phone. There are also 180 ATMs in their area of operation and, for a small fee, you can use ATMS in the AFFN, CIRRUS or PULSE networks nationwide.

Don’t confuse instant access to your cash with instant access to your account. The two are different animals. American First National Bank provides both but not all banks are so accommodating. It gives internet access to your accounts where you can order checks and pay bills online Voice access enable you to access your bank account anytime from anywhere in the world, every minute of every day. This bank also gives you 24-access to your checking or savings accounts through its ATM card. The service is free if you use a First National Bank ATM but you may incur a small charge if you draw cash from another institution’s ATM.

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Americans are saving 400 percent more than they were in 2005. This is an encouraging trend but not as impressive as it sounds. Six years ago, savings reached a low point of 1.4% so rising to its present 6 percent is a big leap but still compares unfavourably with the rates in the 20 years between 1950 and 1970 which hovered around 8 percent and at times even soared above 10 per cent.

If we can thank the recession for anything, it is for encouraging the savings habit again. Not that there is a huge amount for which to thank savings institutions. A good current savings rate is around 1 percent and that might come loaded with unattractive conditions such as a minimum opening sum or maintenance balance or monthly fees. So on the one hand, savers are encouraged to save for present and future contingencies and on the other, the rewards for doing so are derisory enough to discourage putting money aside on a regular basis. Add to that, the seductive temptations offered by credit card companies, air miles, discounts, cash back, gas purchase incentives, 0 interest rates for anything up to two years and it is easy to see why Americans prefer to spend rather than save.

With inflationary costs, unemployment and increasing debt it is particularly difficult to save in the current economic climate. There are some savings tips, though, which help to establish the savings habit, which some experts say should be as high as 30% of income if we want to provide for emergencies and retirement.

  1. Choose your house carefully to minimise moving costs. Particularly in times of house value slumps, moving too often or buying above your means can cost you dearly.
  2. Select an area close to schools and public transport. This means that you can probably manage with only one family car – a big saving in gas, insurance and automobile loan repayments.
  3. Limit restaurant outings to special occasions and cook celebratory meals at home.
  4. Try to balance high-spending items that you consider essential to your wellbeing with low cost savings. You might choose an overseas holiday over frequent visits to the bar.
  5. See if your health plan offers a gym membership as an incentive to better health.
  6. Don’t start too big and get discouraged. Whatever you save at the outset, make sure it is manageable and work your way upwards from there. Even putting all your dimes in a jar is better than saving nothing at all. You can work your way up to dollar bills and then, the sky’s the limit until you reach your 30%
  7. Like a diet, falling off the savings habit is not the end of the world. Climb back in there as soon as finances ease up and start again. We all go through patches of particular financial demand. Give in to them when they arise and know that things can only get better.
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Savings Accounts 07/14/2011
 
You want the good news first or the bad? I’ll give you the good. You should be paying a lot less for your mortgage while interest rates are low. The bad is that you receive a low interest rate on any savings you may have.

Right now, interest on savings is good if it is anything above 1%. There are a couple of banks and savings institutions that are giving you interest at that rate, although Nationwide Bank, with an Annual Percentage Yield of 1.05% says that you have to keep a minimum of $500 to earn that yield. If you take your cash to Ally Bank, you will earn an APY of 1.04% and there is no minimum deposit. ING Direct and American Express each pays an APY of 1.00% for no minimum deposit. Save your emergency cash in FNBO and with a minimum of $1, you earn an APY of 0.85%. FNBO is an online account with no monthly fees and no balance minimums.

It should go without saying that it is essential that you choose an institution with the best yield but without any fees. What you earn on your deposit is so low that you certainly do not want to be paying them to lend them your money. In effect, that is what is happening if you pay fees to deposit your cash. They use the cash to lend to others, pay you very little for the privilege and then charge you fees. Don’t do it.

Institutions vary in how they compound interest. Effectively, it makes so little difference between daily and weekly or even monthly compounded interest that you should not be too hung up on which one you choose. Make sure that the conditions are right for your needs and don’t worry too much about how your interest is compounded.

Choose a reliable institution which is FDIC insured. This ensures that whatever happens to the institution, your cash will be safe, provided you keep within the FDIC limit of $250,000 per person per account in one institution. Joint accounts, for example between husband and wife, get double the protection up to $500,000.

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