Choosing the best high interest deposit account involves knowing about how various banks compete, what products they generally offer, and what options are best for a personal or household budget. Deposit accounts are just accounts that persons or businesses deposit money into. Conventional commercial banks offer deposit accounts like simple personal or business checking and savings accounts to allow depositors to put their money in a safe place. Most deposit accounts are insured by the Federal Depositors Insurance Corporation up to a certain dollar amount.
One big step in choosing the best high interest deposit account is to know what kinds of deposit accounts are usually offered to the public. Customers can take a look at brochures from different local banks offering various checking and savings account opportunities to see how these accounts differ. Some will have more “free options” like ATM or teller transactions, balance statement inquiries, and more, while others will have slightly higher rates of interest. Those interested in a high interest deposit account can look around to see which banks offer the best interest rates.
Beyond simple checking and savings accounts, those who are looking to gain more interest from their money can talk to banks about specialized types of accounts like “passbook" savings accounts or certificate of deposit accounts. While passbook savings accounts may offer slightly higher interest in exchange for self-tracking of transactions, a certificate of deposit account offers higher rates when depositors agreed to leave their money in the account for a longer period of time. Some of these options can help provide a higher interest rate or “interest return” for the depositor.
When looking for the best types of high interest deposit account options, potential bank customers should also understand the new appeal of money market accounts and money market funds. These two types of money market financial products are slightly different. Banks have started to offer money market accounts to customers, since they can attach slightly higher interest rates than those on conventional savings accounts, and still maintain their profit or operational margin. Money market accounts and money market funds are both tied to specific types of short-term bonds. Money market accounts maintain the value of 1.00 for each invested dollar. Money market funds may fluctuate more and experience more types of volatility depending on what risks they are exposed to by fund managers.
Another step in this shopping process relates to utilizing existing affiliations with an employer or group. Beyond the usual 401k options that help employees grow their money by investing into company-matched or company-offered funds, a local bank may partner with an employer to offer employees better interest rates or other perks. Always ask banks about any available programs to raise interest rates on deposit accounts in order to get the best returns on cash holdings.