| How to Find the Best Savings Rates |
Can you guide me to a bank that pays the highest interest? What I would like to do is put in a good lump sum and also be able to pay my bills through this account.
The best savings rates are always a moving target because banks change the rates they pay based on market conditions and their need for cash. That’s why I’d prefer to lead you to a good Web source for rates rather than a specific bank. The great thing about Web sources is that they regularly update their data and often provide links to the banks’ Web sites so you can open an account online.
My favorite rate-shopping site is BankRate.com. At the top of its home page is a series of tabs, each labeled with a different type of bank account or product. Clicking on the "Checking & Savings" tab brings up a chart that shows the national average rates for different types of checking and savings accounts. You can either click on the type of savings account you want — such as a checking or money-market account — or go to the bottom of that chart, where a link allows you to search for rates in your area.
You’ll get another prompt that asks whether you want the site to sort the information by interest rate, state or type of account, such as traditional checking or Internet-based checking. The rates you see may vary depending on how you sort the data.
For instance, a recent search showed that EverBank was offering an interest-bearing checking account with a 3.4 percent rate. But if you searched for money-market accounts that offer check-writing privileges, the same bank offers a 5 percent rate.
I should note that BankRate.com makes its money from advertising by banks seeking your business. But banks don’t have to buy an ad or pay a fee to be included in BankRate’s rankings, says Greg McBride, a BankRate Inc. analyst. Any bank that offers deposits in all 50 states and whose rates are available to new customers is included.
(Note: The Star-Telegram runs a list of checking, savings and CD rates at local banks and credit unions every Monday in Work & Money. The list is supplied by BankRate.com.)
I recently got my Equifax credit report and FICO score for the first time. My score is 757, which FICO says is "very good."
Under "Key Factors Affecting Your Score," the report mentions "the length of time your accounts have been established is relatively short." (Only time will improve that!) And: "The amount owed on your accounts is too high."
That last statement has me confused. I have two revolving accounts, which I pay off every month. I have never carried a balance. On my older account, which is about 3 1/2 years old, I have a credit limit of $500 and a typical current month’s balance of $46. On my other account, I have a limit of $22,000 and a current balance of $309. Together, my combined balance of $355 is only 1.6 percent of my combined credit limit of $22,500. How can a balance that uses up such a small part of my available credit possibly be considered "too high"?
Having made the effort to get as high a score as possible, it irks me that I am being penalized, if only by a few points, for supposedly having too high a balance.
The FICO model is always going to tell you something that you can do to improve your score, but when it resorts to saying your balance is high when you’re using just 1.6 percent of your outstanding credit, it’s "scraping the bottom of the barrel" for score-boosting advice, said Craig Watts, a spokesman for Fair Isaac Corp., which designed the FICO scoring model.
The biggest factor that affects your score is time, he added. You’ve obviously been extremely responsible with credit during the nearly four years you’ve been using it. If you keep it up, your score will naturally rise as you establish a longer credit history.
Once you hit a score of 750, you’re already getting nearly every lender’s best rates. Boosting your score above that level might be good for your pride, but it’s kind of like getting an A-plus-plus instead of an A-plus. That second plus doesn’t mean much.
Also realize that a credit score is a snapshot of one moment. You could get another score tomorrow, and it might be a bit higher or a bit lower, depending on your balances when the report was run.
