6 Percent Online Savings Accounts: Fact or Fiction?

Many Americans have been looking online to get better rates of return on their money in the last few years. Some individuals chase ultra high-yield investments which often turn out to be scams, but they're the exception rather than rule. Most people looking for better interest rates on their money look to internet-based interest checking accounts and online savings accounts to get a better rate on their savings. You can typically find interest rates of 5% at most online savings banks which is magnitudes higher than what most major banks are offering, but are there any accounts than you can reasonably earn 6% with?

There are some instances where you can actually earn 6% on your money online that are FDIC insured and are generally guaranteed. We know that through mutual funds and other investments it's very common to get rates of 6% and above, but with guaranteed investments usually it maxes out around 5.25%. In order to earn a 6% rate of return on your savings, usually you'll have to move your money around quite a bit. There's always one or two banks running a promotional interest rate that will last for two or three months, but after that they'll drop back down to around 5.00%. HSBC was offering a 6% rate for a while, and now FNBO direct is offering a 6% rate. That promotion will go to the end of November, and undoubtedly another bank will offer 6% for a limited time in order to attract new customers. If you want to earn 6% on your savings, you're going to have to move your money quite a bit, open and close new accounts.

With these promotions, there's often some limitations. Usually the money being invested has to be for a new account. If you're an existing customer of the bank, chances are you won't qualify for a 6% promotional rate. This makes it important that you close your accounts and move your money back to a reasonably high interest rate account getting 5.25% after the promotional period is over, so that if the bank running the interest rate promotion ever does another one, you can be a new customer again and qualify for said interest rate

Often times there are limitations as to how much or how little money you can put into these accounts as well. Some have a ceiling that you can only earn the great interest rate up to a certain amount, and some have large minimums so that they only attract individuals with very large account balances.

Often times banks will run promotions with certificates of deposit that will allow you to get rates at 6% or above, sometimes even as high as 8% in some cases. Usually these are to attract attention to the bank and hopefully earn new customers. Sometimes you have to meet certain qualifications to become a member of the credit union or bank offering the promotion, so there can be some work involved in some cases.

It comes down to how much work you want to do to get the best interest rate. If you're willing to move your money around regularly and constantly seek out new savings accounts and deals, you can easily earn 6% on your money annually, but if you'd just like to put your money somewhere and let it be, chances are you'd be better off throwing it into a savings account earning 5.25% APY.