Where to Stash Your Cash

Back in the early 1980s, you could walk into a bank and get a six-month certificate of deposit yielding more than 15%. And even as late as 2001, you could get one yielding more than 4%.

The average yield lately? A minuscule 0.15%. That’s 15 one-hundredths of one percent…or $7.50 per year interest on your $5,000 deposit. For money-market and savings accounts, the average yield is even less—0.11%. And don’t expect much more from five-year CDs. They average 0.78%.

So what’s a yield-starved saver to do? We asked three personal finance experts how savers can get more for their money today without ratcheting up risk…

MONEY-MARKET AND SAVINGS ACCOUNTS

If you are willing to do most of your banking electronically, several online banks and easy-to-join credit unions* offer accounts yielding around 1%. Consider these recent yields…

Quorum Federal Credit Union HighQ Savings: 1.05% annual percentage yield (APY).** QuorumFCU.org

Connexus Credit Union ­Money Market: 1.15% for deposits of $100,000 or more…1% for $50,000 to $99,999…0.75% or less for lower deposit amounts. ConnexusCU.org

EverBank Yield Pledge Money Market: For new accounts, 1.4% up to $50,000 for the first six months…0.61% thereafter. That is the equivalent of a 1.01% rate for the first year. EverBank.com

SFGI Direct Savings: 1.01% (APY). SFGIDirect.com

If you prefer a traditional bank with many physical locations, consider…

Capital One Bank Smart Savings: 0.85%. Rates are guaranteed not to go down for the first 12 months. ­Nearly 1,000 branches in eight states—Connecticut, Delaware, Louisiana, Maryland, New Jersey, New York, Texas and Virginia—and the District of Columbia. CapitalOne.com

HIGH-YIELD CHECKING

Few banks are offering high-yield checking accounts because of government rules that cap what banks earn on each debit card swipe. But you can find yields as high as 5% or more at online banks and credit unions.

What to do: Be prepared to accept various conditions to qualify for attractive rates. These may include setting up at least one direct deposit per month, making a specified number of debit or credit card purchases per month and/or receiving electronic statements. Pay attention to balance caps—the maximum balances on which you can get high interest rates—and make sure that any credit union you join offers access to networks of shared branches and surcharge-free ATMs, as the following credit unions do…

Consumers Credit Union (CCU) Free Rewards Checking Account: 5.09% for balances up to $10,000. Above that amount, tiered rates from 0.2% to 0.1%. MyConsumers.org

Inova Federal Credit Union Ovation Checking: 3% up to $20,000. Above that amount, 0.15%. InovaFCU.org

Bank of Internet USA’s Rewards Checking: 1.25% up to $150,000. Above that amount, no interest. BankOfInternet.com

CERTIFICATES OF DEPOSIT

It is not wise to invest in most long-term CDs now because rates are likely to start rising next year.

Highest-yielding nationally available short-term CDs…

Connexus Credit Union nine-month CD: 1.01%. ConnexusCU.org

Melrose Credit Union one-year CD: 1.15%. MelroseCU.org

Xceed Financial Credit Union 17-month CD: 1.5%. XFCU.org

Alternative: Consider flexible, longer-term CDs that don’t start off with the highest rates but allow you to benefit from rate increases in the future, ­by either allowing you to cash in the CD early and pay a relatively low early-­withdrawal penalty or letting you bump up the rate on your existing CD before it matures when the financial institution offers a higher rate.

Best low-penalty CDs…

Synchrony Bank five-year CD: 2.3% with an early-withdrawal penalty of 180 days of interest. That’s the equivalent of a 1.72% rate if you close the CD after two years. $25,000 minimum. MyOptimizerPlus.com. (Note: Synchrony Bank was formerly GE Capital Retail Bank.)

Barclays Online Banking five-year CD: 2.25% with an early-withdrawal penalty of 180 days of interest. Banking.BarclaysUS.com

Best bump-up CDs…

Ally Bank Raise Your Rate two-year CD: 1.1%, allows you to bump up your rate one time if Ally raises its CD rates. The four-year version, 1.3%, lets you bump up your rate twice. Ally.com

CIT Bank two-year RampUp Plus CD: 1.25%, allows a onetime rate increase and a onetime additional deposit. $25,000 initial minimum purchase. The four-year CD, 1.7%, offers the same ramp-up feature with a $50,000 initial minimum. BankOnCIT.com

Smart step: Check your local banks and credit unions for special and ­limited-time promotional rates on both CDs and high-yield checking accounts. These smaller institutions often use promotions to attract deposits to compete with larger competitors. Example…

Pelican State Credit Union, with membership restricted to select ­businesses and residents in Louisiana, recently offered a 4.01% checking account yield on balances up to $10,000. ­PelicanStateCU.com

PREPAID CARDS

Some of the highest-yielding FDIC-insured accounts aren’t at banks or credit unions. They come from prepaid cards that let consumers load money onto a debit card that they later can use to get cash from an ATM or to pay for items at a store, on the phone or online. You can earn as much as 6% APY on up to $5,000 in a linked savings account that often comes with these cards.

Drawbacks: Potentially high fees on some cards, including a monthly service fee, purchase transaction fees and ATM fees that can eat up the accrued interest you earn. Also, you need to sign up for a monthly direct-deposit program.

What to do: Choose carefully. There are dozens of providers ranging from American Express and H&R Block to Chase Bank and Western Union with different fees and rules. Consider using the prepaid card only as a savings account, especially if there are high transaction and ATM withdrawal fees.

Consider these…

Mango Prepaid MasterCard Debit Card offers 6% APY on amounts up to $5,000 in its associated savings account (and 0.1% above that amount). There is a $3 monthly fee and a $2 fee per ATM withdrawal, but no purchase transaction fees. You also get six free transfers per month. MangoMoney.com

NetSpend Prepaid Visa or MasterCard Debit Card gives you 5% APY up to $5,000 in its linked savings account (and 0.5% APY above that). There is no monthly fee, but you pay $1 to $2 for each purchase transaction and $2.50 each time you use an ATM. NetSpend.com

*Credit unions in this article have easy-to-meet membership requirements.

**All interest rates are subject to change.