small savings account options?

[pocomom]

By cutting out unplanned eating out (still have date night, but no run through Dunkins, Starbucks etc) and being smart with the grocery budget- reducing waste, using what we have and stocking up on only good sales, I was able to save $500 in my savings account. Yay, me! Additionally, I cashed out $100 from credit card rewards in Amazon gift cards, $25 in Lowes and $25 in Target as well as earning another $25 on their gift card deals, and $10 from swagbucks.
So that's another $185 I'll put towards normal purchases this month that will help keep me on track for saving another $500 this month. After that my very part time job kicks in and I should be able to put away another ~ $500 a month through the summer.

We have other savings etc. but my dh handles the big stuff. Right now the money is in a regular savings account from my bank that does nothing. The plan is for this money to go on a vacation maybe next Spring. I'm wondering if there is a better option out there that will do something?

 

[havaneselover]

Not much with rates so low but check out Capital One 360.

 

[Jen and Ashwin]

Check out Ally Bank as well.

 

[Marionnette]

By cutting out unplanned eating out (still have date night, but no run through Dunkins, Starbucks etc) and being smart with the grocery budget- reducing waste, using what we have and stocking up on only good sales, I was able to save $500 in my savings account. Yay, me! Additionally, I cashed out $100 from credit card rewards in Amazon gift cards, $25 in Lowes and $25 in Target as well as earning another $25 on their gift card deals, and $10 from swagbucks.
So that's another $185 I'll put towards normal purchases this month that will help keep me on track for saving another $500 this month. After that my very part time job kicks in and I should be able to put away another ~ $500 a month through the summer.

We have other savings etc. but my dh handles the big stuff. Right now the money is in a regular savings account from my bank that does nothing. The plan is for this money to go on a vacation maybe next Spring. I'm wondering if there is a better option out there that will do something?

I second the idea of CapitalOne. They don't have a minimum balance requirement and they offer a slightly better rate than my local bank. But like @havaneselover pointed out, you're not going to get a fabulous rate anywhere.

I actually opened a checking account with them as well. Money can be transferred immediately from my CapitalOne savings into that checking account (it takes 3 or more business days to go between my TDBank checking account and my CapitalOne accounts). I can then access my cash at any ATM. It's also the checking account that I use for my PayPal account.

 

[pocomom]

I second the idea of CapitalOne. They don't have a minimum balance requirement and they offer a slightly better rate than my local bank. But like @havaneselover pointed out, you're not going to get a fabulous rate anywhere.

I actually opened a checking account with them as well. Money can be transferred immediately from my CapitalOne savings into that checking account (it takes 3 or more business days to go between my TDBank checking account and my CapitalOne accounts). I can then access my cash at any ATM. It's also the checking account that I use for my PayPal account.

Yes, wasn't expecting much ... but maybe something! When I was a kid my savings account gave me 7% ah, the good old days!

 

[Jen and Ashwin]

I like Ally because it gives a better rate than Capital One. You get 1.00% at Ally vs. 0.75% at Capital One. I used to bank with ING Direct before Capital One bought them and they had the best interest rate, but not anymore.

 

[LinderInWonderland]

Also check credit unions near you. I live in WA, but my credit union gives 4% interest on the first $500 in my checking or savings account.

 

[barkley]

Also check credit unions near you. I live in WA, but my credit union gives 4% interest on the first $500 in my checking or savings account.

Washington as well here and another vote for checking out credit unions. ours has a 'first five' savings account that pays 5% on the first $500 then whatever the normal rate is on the remainder. we can open one for each person w/a social security number so both dh and I have one to maximize the interest on at least $1000 in savings.

 

[cariann77]

I have a Capital One 360 account that I like. I recently found a high rate through Barclays. Check out the Barclays Dream account. They give 1% I believe.

 

[ruadisneyfan2]

I second the idea of CapitalOne. They don't have a minimum balance requirement and they offer a slightly better rate than my local bank. But like @havaneselover pointed out, you're not going to get a fabulous rate anywhere.

I actually opened a checking account with them as well. Money can be transferred immediately from my CapitalOne savings into that checking account (it takes 3 or more business days to go between my TDBank checking account and my CapitalOne accounts). I can then access my cash at any ATM. It's also the checking account that I use for my PayPal account.

I have their checking acct also. I only signed up for it because they were offering a $50 account credit for opening a checking acct and making 3 transactions.
So I opened one for me and one for dh, then used their atm card to buy 6 gift cards for our grocery store and we both got the $50 bonus. At first I had every intention of closing it out but then I really liked having it so I keep it.

 

[Albort]

If you got a good credit, i would suggest signing up for credit cards with big points returns, then redeeming them from travel. AA can net u 100k right now, that should be a good amount needed to travel. Need a hotel? well theres also a credit card for that. UA can potentially net you 100K as well, u can travel to Asia from LA with 65k pts.

The only downside to using credit card to redeem is that you need to complete the minimum spendings by a certain amount of time. so like 3k in 3 months, or 4k in 3 months.

 

[angierae]

I'm really happy with my Capital One 360 account for vacation savings. There's no minimum, so if I drain it for a trip, it doesn't count against me.

 

[maxiesmom]

I have a Capital One 360 account too. I have it set up so a little from every paycheck goes directly to it. Even a small amount adds up quickly, when you don't even see it.

 

[starry_solo]

Discover Bank
Synchrony Bank

Those are the two that popped up with pretty good interest rates for savings accounts.

 

[mslhb]

I love Capital One 360. You can have multiple saving accounts tied to one customer account. We have one for emergency, house, car, vacation and gifts. The website is very user friendly and it is easy to move money in and out of accounts. There is no minimum so I don't have to worry about draining my save to spend accounts.

 

[HeyIt'sMe]

Another vote for Capital One 360!

 

[ktmo]

I love Capital One 360. You can have multiple saving accounts tied to one customer account. We have one for emergency, house, car, vacation and gifts. The website is very user friendly and it is easy to move money in and out of accounts. There is no minimum so I don't have to worry about draining my save to spend accounts.

This is what I do. I have multiple savings accounts. I like being able to see how much I have in each account.

 

[MuppetBaby]

I use SmartyPig. No physical bank so I don't have temptation to withdrawal the money and if you cash out, you can get a discount on select gift cards.

 

[tvguy]

Yes, wasn't expecting much ... but maybe something! When I was a kid my savings account gave me 7% ah, the good old days!

I put my life savings (savings from my first 2 years of working after college) in a CD in 1981 at 17%.

 

[DVCcurious]

Yes, wasn't expecting much ... but maybe something! When I was a kid my savings account gave me 7% ah, the good old days!

7%! Now you only get like 0.5%. To answer the OP's question: you can't get more than 1% for short-term money no matter what you do. And you never will be able to get more than 1% ever again.

My mom saw a 3 year CD for 1% APY and called me to ask my opinion. What I told her (and now am telling you) is 1% for 3 years is a great rate because the US "can't" raise interest rates. So you'll never see even "average" rates again. Ever.

The US Debt is now $19 trillion. When we last had "normal" rates under President Bush our national debt was about $11 trillion. When we had high interest rates under Clinton the debt was about $6 trillion. Let's do a little math here:

Interest on $6 trillion at 7% = $420 billion (approximate Clinton years)
Interest on $11 trillion at 4% = $440 billion (approximates Bush' years)
Interest on $19 trillion at 2.5% (approximate 30 year rates currently) = $475 billion

So to keep our interest payments stable our government has had to slash interest rates (remember, the 0% interest rate was supposed to be an "emergency" rate....but it's still here 8 years later, and the unemployment rate is below 5%, so clearly it's no longer an "emergency").

If you want to see "normal" interest rates of 5% on your savings then we'd have to see the same 5% on our national debt. Which means we'd be paying $500 billion more per year in interest. Which means we'd have to cut $500 billion in programs, raise taxes $500 billion, or borrow $500 billion more. And if we borrowed it just imagine the compound interest on the borrowings over a few years!

Which politician is out there saying "I want to normalize interest rates, and to pay for it I'm going to slash $500 billion of government programs!" Nope, raising interest rates is just not going to happen.

Japan has had extremely small interest rates (sub 2%) for 25 years so it's not "impossible" to have low rates forever. I suspect the US will never see 4% CD rates again. We just can't afford the interest payments at normal rates.