Savings: Where to get high yields now

The Fed’s decision to cut rates in September gave a shot of adrenaline to the stock market, yet it also made it tougher on savers to earn a high rate of interest. In the aftermath of the cut many banks slashed their yields on CDs lasting a year or less and on high-yield savings accounts by half a percent or more. At least for the time being, it’s going to be harder to earn 5 percent on your savings. 

But if you’re out hunting for high yields there are still some to be found. Here’s a round-up of the best places to stash some cash:

Savings and Money Market Accounts. Big online savings banks like HSBC, ING, and Emigrant have dropped their rates. Yet at this writing, Capital One and Citibank are still offering 5 percent APYs. Zions Bank is paying 5.3 percent on deposits of $1,000 or more and 5.56 percent on deposits of $50,000.

CDs. Most experts expect savings rates to head lower in the near future, so if you’re trying to lock in 5 percent. look to a certificate of deposit. And if the Fed cuts rates again you’ll be glad you did. Advanta Bank,  Capital One, Centennial Bank, E*Trade, and Nexity Bank are all offering 5 percent or above on one-year CDs. Right now yields are pretty similar among 6 month, one-year, and five-year CDs, so you can choose depending on your time horizon. 

Shopping safe
To compare rates on CDs and high-yield savings accounts go to Bankrate.com.  The more money you deposit, the higher the rate of interest you may get. But as the recent bankruptcy of NetBank shows, you shouldn’t put more than the FDIC-insured $100,000 into any one Internet bank account.

That bankruptcy also underscored that you should check the financial strength of the bank before depositing your money. Bankrate.com and TheStreet.com both assign ratings to banks for financial health. All the banks mentioned above have three or more stars from Bankrate.com. Though you can often get higher yields from low-rated or un-rated banks, a couple extra basis points of interest aren’t worth the hassle of chasing down your money if the bank folds. —Chris Fichera