One of the purposes of this blog is to help you save money, and today’s post is literally focused on that topic. Putting aside a set amount of your paycheck each month can build up a safety net that can rescue you when unplanned expenses strike, like car and appliance repairs or emergency dental work. But you may not feel much incentive to save when you look at the interest rates paid by your local bank. Rates on a money-market savings account can be as low as 0.06 percent, and standard savings accounts may garner just 0.08 percent.
Tired of seeing just a few cents in interest on my deposits each month, I decided to investigate online offerings and opened an account with Discover Bank a couple of years ago. At first, I was nervous about having money in a bank that didn’t have a local office with people I could go in and talk to. But now I can say I made the right choice.
Currently, Discover is paying 1 percent interest on its savings accounts. That may not be a stellar number, but it is more than 10 times higher than the interest you earn at many local banks. As your savings deposits begin to accumulate, you’ll appreciate the impact the extra percentage points have on your total.
Discover is FDIC-insured, so your money gets the same level of protection as it would at your local bank. You can link your Discover Bank savings account to a checking account at your local bank and transfer money between accounts electronically. The free transfers can take a few days, so I recommend keeping a few hundred dollars in a locally based savings account in case you need immediate access to your money. You can also transfer funds by phone, deposit a portion of your paycheck directly into your account or set up automatic transfers of funds from another account into your Discover Bank account. The bank also attaches deposit slips to your monthly statement which you can use to mail in a deposit by check. You can make incoming wire transfers to your account at no charge as well.
You must deposit at least $500 to open your account, but there is no minimum balance requirement after that and no monthly fee to maintain your account.
For more information, check out Discover Bank’s frequently asked questions about its savings accounts.
When I’ve had questions about my account, I received prompt, courteous service from the bank by phone and by email.
While you probably won’t make thousands in interest with any savings account, Discover Bank can get you on the road to a higher rate of savings.