How to Compare Bank Account Interest

To attract potential clients to deposit money in their facility, banks offer interest rates on  accounts. The difficulty for you as a consumer is to understand the differences when deciding which bank to deposit your money. There are several factors to consider, such as terms of the account, fee structure and insurance with the Federal Deposit Insurance Corporation.

1. Research banks and lending institutions to find the highest interest rates, the least amount of fees and the fewest penalties associated with their accounts. Bank account interest rates are also known as APY, or annual percentage yield. 


2. Compare many different sources. Many banking and credit union websites will provide their savings rate information on their website. They oftentimes will provide calculators for you to calculate how your money will increase at their given rate. 


3. Compare different types of accounts. Both checking accounts and savings accounts may offer interest. Savings accounts typically with offer higher interest rates than checking accounts, but there may be more fees associated with checking accounts. 


4. Educate yourself on the fees and limitations. Some checking accounts offer easier access to your money when you need it, but savings accounts have higher interest rates. There may be minimum balances you need to maintain in order to earn the stated interest rate and there is most likely a minimum amount required to even open the account. 


5. Go to an online savings rate guide. These websites list numerous bank rates for easy comparison. There are many available online, such as Bankrate.com. These sites are typically updated at least daily. 


6. Understand the fee structure and limitations. Find out if the stated rate is available for only a limited time. Check for penalties for dropping below a minimum balance. Ask for an explanation of the fee structure when verifying the offer.


7. Verify that the bank is FDIC insured. As of 2009, the Federal Deposit Insurance Corporation insures up to $250,000 per depositor per institution.