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Passbook and statement savings accounts hit record lows

Ah, the good old days. Fifteen years ago you could get a whopping 5 percent or better on your passbook or statement savings account. Of course, you were also paying about 10 percent for your mortgage back then.

The latest survey by Bankrate.com shows traditional savings accounts now offer interest rates in the neighborhood of 1.5 percent, the lowest since Bankrate began tracking these rates in 1987. Not a neighborhood you should move into.

Passbook Savings AveragesThere's really no reason to stash your cash in a low-interest-rate savings account. Money market accounts and certificates of deposit will give you a much better return -- more than double the interest -- and keep your money just as safe.

Just as with passbook and statement savings, your money market account and CDs are federally insured. You'll sacrifice some liquidity with CDs, but money market accounts will give you instant access with no penalty for withdrawals.

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Money market accounts are very much like traditional savings accounts except that you can write checks on them. You'll have to be careful about how many checks you write; some institutions limit the number of checks that can be drawn on the account within a certain period.

Some institutions will give you ATM access to your money market account.

Ready to invest in a CD? Find the best yields in your area.

Bankrate.com makes it easy for you to find the best rates in your state and across the country. We continuously update our listings of the highest money market accounts and CD rates.

If you're determined to have a traditional savings account, of course we can help you there, too, with our section on passbook and statement savings rates.

While you're browsing, take a peek at our checking account study for the best fees. Just one more way to save you money and give you the biggest return on your hard-earned dollars.

-- Posted: April 18, 2001

 

See Also
Chart: Passbook and statement savings rates -- (Updated 04/17/01)
Securing your stash
Swiss banks aren't only for spies
Save energy -- and slash your bills
Living below your means
Savings glossary
More savings stories



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