Low interest rates at the bank have you annoyed? Well, they should. Receiving less than 3 percent interest on your money is not only unnecessary but it is also keeping you from staying ahead of inflation. Your local bank isn’t the only option for building wealth nor should you have to settle for below market interest rates. Read on and we’ll examine some high yielding, low risk investment strategies for you.
Online Banks – Online banks are one way where you can get more for you money, literally. Banks such as ING Direct, HSBC Direct, Emigrant Direct, and NetBank pay higher than average rates on simple savings accounts and CDs. Rates of 4.5% or higher are not uncommon clearly ahead of the rate of inflation which many have said is running at just over 3%.
Offshore Banks – No, you won’t have you money backed by the federal government and yes you really must be careful who you decide to bank with. The Cayman Islands and Switzerland have been two popular places where consumers can stash their cash and receive a rate of return higher than most banks around the world. If you are looking for a risk free investment this is as close to it as it gets. When investing overseas political stability is key; make certain that you fully understand what the local political climate is and your rights as a foreign consumer.
Bonds and Notes – From time to time US saving bonds are a good deal, but right now isn’t one of those times. Still, when interest rates are pegged higher than the yield on U.S. Treasury savings bonds can be attractive. Consider regular bonds and notes if the low yield rate isn’t something that you can live with [or on].
Credit Unions – Not too often considered are credit unions which are owned by its members. Rates with some credit unions are higher than the average bank making them an attractive option for some. You may have to qualify to become a member so check with your desired credit union to find out what the requirements are.
Some commercial banks are fighting back by offering special rates to attract and retain customers. These consumer wise institutions know that if they don’t offer a deal to you, the consumer, then their competition will. The result is that they keep you as a customer and you make more money on your savings. A win-win situation for all!