Mar 3, 2009 2:29 pm US/Eastern
Have Banks Bid For Your Savings Account Business
BOSTON (WBZ) ―
As more of us worry about our economic security, we are once again becoming a nation of savers. The personal savings rate is climbing to levels that haven't been seen in years. A year ago, it was just .1 percent. This past December it jumped to around 4 percent, and it continues to climb. In January, the savings rate hit 5 percent.
The stock market, which is at a 12-year low, has many investors queasy and looking for alternatives to equities.
Marty Leamy knows he is fortunate to have an extra $5,000 to invest, but was frustrated trying to find a good interest rate. He decided to try
moneyaisle.com, which allows more than 100 banks to bid for your business.
All he did was input how much, and for how long, he was able to invest his money. Then he just watched dozens of banks make him offers, for both high yield savings accounts and CD's.
Leamy ended up with a rate of 2.86 percent on a six month CD from Flagstar Bank in Troy, Michigan. "I actually printed out an application and sent a check," he explained.
It's wise to do a little research on the bank first, however. We found that Flagstar's Safe and Sound Rating from
bankrate.com was just two stars. This means it falls below its peer group in terms of its financial strength. That didn't bother Leamy, however. "It's protected to $250,000. It's a good investment, short term."
Competitive rates are often from out of state banks, so you need to be comfortable knowing that you won't be able to visit a corner branch.
A service like this might become even more popular as Americans look for more places to stash their increased savings. Some experts say that the personal savings rate could climb to 8 percent in the coming months.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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