- Author Sarah Li Cain needed a place to keep her savings for her first home that would earn interest but not put her money at risk.
- She settled on a high-yield savings account with Ally, which had no monthly fees or minimum-balance requirement, and it had a 2.20% interest rate (although as of October 2019 that interest rate is 1.80%), which means it earns about 20 times more interest than money in a savings account that might pay 0.1% at a traditional bank.
- Since opening the account, she’s been so happy with its customer service and ease of use that she moved money she’d been keeping in a traditional bank into Ally, too.
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A few years ago, my husband and I wanted to plan for a major purchase — our very first house. As someone who likes to maximize her savings, I was concerned I had to let my money just sit there for a few years while we went through the house-hunting process.
I’m someone who likes to leave as little money as possible in a regular bank account (except for our emergency savings fund) because I love to invest my money and watch it grow. In this case, however, it didn’t make sense to stick money in a brokerage or retirement account because I wanted a conservative option — I didn’t want to lose the money I was setting aside for a down payment on my future home.
After doing some research, my husband and I decided on a high-yield savings account. With it, we could earn a bit of money from interest and access our funds relatively quickly, two of the most important things we were looking for.
We chose Ally for its lack of fees and minimum-balance requirement
I feel lucky to be living during a time when I can do research online. With so many comparison websites and banks competing for my business, I was able to compare bank accounts pretty quickly.
We settled on Ally Bank’s online high-yield savings account. Ally has:
- A 2.2% interest rate (when I opened the account; as of October 2019 the interest rate is 1.80%), compounded daily
- No fees or minimum required balance
- Federal Deposit Insurance Corp. insurance up to $250,000
- 24/7 customer service.
My husband and I liked the fact that it doesn’t charge any monthly maintenance fees and there is no minimum-balance requirement. Because we were just starting our savings journey when we opened the account, we didn’t want to transfer more than $50.
Something else I liked was that its interest rate (1.90% as of September 2019) is one of the highest we’d seen. It’s even comparable with rates you’d find for certificates of deposits, with more immediate access to our cash. A 1.80% interest rate means that money earns nearly 20 — or even 200 — times more than it would in a traditional bank account, which typically pays only .01% to 0.1% interest, if anything.
Before this, we had a checking account for our daily transactions and a savings account for our emergency fund at my husband’s local bank. We loved the customer service, so we didn’t think twice at looking at the rates we were earning with either of these accounts.
We set up automatic monthly transfers to help us save more
We had no intentions of tapping into our savings account often, so we were fine with the fact that we were allowed only six withdrawals per month.
We linked our Ally account to our checking account so we could easily transfer money toward our house fund. We set up automatic transfers and made some manual transfers whenever we wanted to put more money in the account.
Otherwise, we just let the account sit there and grow, slowly but surely, logging in every few weeks to see its progress. It’s exciting to see money grow! We weren’t too concerned about letting the money do its thing because we knew that we didn’t have to pay maintenance fees, and our money was insured through Ally by the FDIC.
It’s safe to say we’re obsessed with our Ally account
I’m glad we opened our high-interest savings account. It was a painless signup process, easy to set up transfers, and when we eventually wired money for our house closing, I felt good knowing Ally called to make sure it was me who initiated the transfer.
That wasn’t the first time I’d spoken with Ally. We liked how responsive the customer service was — I never had to wait more than five minutes to talk to someone on the phone or via its chat app — and that we could call outside of business hours.
After opening an initial account with Ally, we transferred our money from our regular bank account into Ally, too. When we checked with our local bank, we found out we weren’t earning any interest, and the rate for its savings account was much lower than what Ally offered.
I’m happy we went with a high-interest savings account because it meant I could earn a bit of interest while keeping our money close. I also felt great knowing we could pounce on a deal once our dream home came on the market — and when it did, we pounced as planned. As we get ready to move into our new place, it feels good knowing that I was able to find a good bank account to house our funds.
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