Two things to make sure to keep in mind when you are finding a good savings account is that your money needs to be both liquid and safe. You don’t want to put your emergency funds into anything that is high risk – because the money might not be there when you need it – and you don’t want the money locked away in some fund that you can’t get to easily, because that would obviously defeat the purpose of having it be there for emergencies.

Another thing to keep in mind is the interest rates on the savings accounts that you are considering. While you want your money to be safe and liquid, you also obviously want the best interest rate available for your money. In this article we’ll take a look at the different types of savings accounts available, see which one makes the most sense for you and look at what sort of interest rate you can expect to get on your money right now.

Types of Savings Accounts

There are two basic types of savings accounts: traditional savings accounts and money market funds. Let’s see what the differences between them are.

Regular savings accounts are held at banks, credit unions, savings and loans associations, and other similar institutions. The money in the account is guaranteed by the bank and the FDIC, so you can rest assured that the money you deposit into it is safe. These types of accounts generally don’t have the best savings account interest rates, but you can find a hidden gem every now and then.

Money market funds are savings-type accounts that you can open with financial and investment firms. In these accounts, the money that you deposit is actually invested in very low risk mutual funds. This generally leads to a better interest rate than is usually offered in traditional savings accounts. Since the money that you deposit is being invested, it is not guaranteed, but the money market fund manager’s primary goal is to keep the funds secure. I don’t think I’ve ever heard of anyone actually losing money in a money market fund.

Current Interest Rates

There are a couple of things that will determine the saving accounts interest rates you will personally qualify for. The primary factor in this is the amount of money that you plan to deposit with the bank or investment firm. There are many banks and investment firms out there that will let you open up an account with just $1, but you’re not going to get an incredibly good rate with these types of accounts.

High interest rate savings accounts usually require a deposit of at least $1,000 to get started, and even then you’re probably going get the lowest rate the bank or firm is currently offering. Depositing more will get you a higher interest rate, and banks and firms generally have rate increases at account balances of $2,500, $10,000, $50,000 and $100,000. Talk to the representative at your particular institution to find out what they offer.

Banks and Firms Offering Good Savings Account Interest Rates

Just about any local bank or investment firm branch is going to have some options available for you, but they may not have the best offer available. Going online can definitely increase your options and help you find better interest rates. There are several institutions that consistently offer great savings account interest rates: ING, Discover Bank, Zions Bank, AIG Bank and Choice Financial. Rates are currently fluctuating from around 1.3% to 2.1%, depending on the market and how much you are going to deposit.

Conclusion

Most people are going to be better served by putting their money into a money market fund than into a traditional savings account. Not only is your money more likely to get a better rate, but access to it is easier as well. However, there may be some great deals at local banks in your area that are better than what you’re able to find online, so make sure to shop around before deciding. You never know what a little research can help you find.