US Fed is trying and trying for a while now to push the interest rate high. But the interest rate is no where near where it should be. We the savers are worst sufferers. Because there is no yield for saving money, on the other side you can take a loan out for 0 interest to very minimum interest rate. Does high interest savings account exist anymore? Yes it does.
High Interest Savings account –
Let me give you a shock, there is a legit saving account that will pay you 5% apr. Do you believe me? Okay, check the image below –
First of all, DCU is not a bank, it is a credit union. You can open the account without ever visiting branch. So you can open the account online. Now, how do you withdraw money? They waive off ATM fees, waive off might not be the right word, they reimburse up to $15 every month. And you can use all other online transfer facilities.
So, DCU can be your emergency fund that is a high yield savings account paying you 5% apr.
Other high yield fixed income sources –
If you do not want to take any equity or stock market related risks, then probably you would want to stay away from money markets. And you still have option to generate debt linked fixed income. No, this wont be solid as US government debt but you will generate enough income to beat the inflation comfortably.
Lending Club and Prosper are market places for debtors and creditors. Debtors go there seeking for a loan, usually to cover medical expenses or house improvement, and these companies evaluate the risk and give them a credit worthiness or rating. And based on the rating the debtors pay interest on the loan. You can become a creditor and earn interest on your investment.
Important thing to note- these debtors might default, as they may lose job or worse can happen, so there is always a risk involved. My return is around 7% from Lending club and 3.5% from Prosper. You can read in details about these here. If you do not want to take any risk, High Interest Savings account is the best option for you.