As I describe in my book Oxen, you begin truly winning with money when your “money makes money for you.”
With that said, here’s a great question to ask yourself: “How much interest is my bank paying me for the money in my savings account?”
Chances are high that the number is 0.01%. In fact, I checked several big banks as I wrote this post and here’s what I found for their basic savings accounts:
- Bank of America – 0.01%
- Wells Fargo – 0.01%
- Bank of the West – 0.03%
This is why I hold all of my business and personal savings in ON-LINE BANKS. This is not a “bank with website access.” They are banks that exist almost exclusively on-line. Since they do not have physical buildings, they have to do extraordinary things to attract customers. I’ve discovered they do two key things very well:
- No fees They’ve virtually eliminated fees – low balance fees, etc.
- Way better INTEREST! They are currently paying around 0.75% on savings (about the same as a 30-month CD, but I don’t lose the liquidity of my money!)
Since 2007, I have held all of my savings and operating reserves with Capital One 360.
I encourage you to do 2 things with this information:
- Find out how much interest your bank is currently paying on your savings.
- Check out the on-line banks we recommend HERE.
Information accurate as of 2/4/2014.