High Interest Checking & Savngs Accounts

The stock market has been smoking hot the last couple of months (and hit a new high yet again today). I am not one to declare the sky is falling, but at these lofty highs it does make me a little bit nervous. Right now I am not committing any new money to the stock market. Instead, I am looking for investment alternatives that still offer great returns for my money.

Back in March I told you about investing in foreign denominated certificates of deposits. These are FDIC insured CDs that provide not only high interest rates, but you can make even more money as the value of the U.S. dollar declines against foreign currencies (which it has). For example, if you invested in a 3 month CD denominated in Icelandic Krona back in March, upon maturity your effective interest earned would be over 14%! Not too shabby. The effective interest rate on the CD was 12.75%, but the dollar as tanked against the Krona in the past 3 months and additional gains were made through the currency transaction.

Does this sound too complicated? Not to fear, you can earn a great return on your money these days by simply opening up a checking account. That's right, there are many banks (both online and brick & mortar) who are offering over 5% on their checking and/or savings accounts. Many of these banks don't charge fees and no minimum deposit is required. Here is a look at some of the best:

Washington Mutual (WaMu) - 5.0% savings rate, free checking, waived fees, Free ATM withdrawls and more.
E-Loan - 5.25% savings account rate, no fees, easy online application.
Emigrant Direct - 5.05% annual percentage yield on savings account, great online banking site and even better they have a Platinum Mastercard that offers cash rebates of 1.4% on all purchases with no limits.
FNBO - 6% savings account interest rate (for a limited time) with no fees or minimums.

Here's your strategy. Keep only enough cash in your checking account for 2 months of expenses. Anything else, including any money sitting around in a savings account yielding a paltry 1.8%-the nationwide average, needs to be moved to one of the banks above IMMEDIATELY. Almost all of them offer free checking and some sort of ATM program so you can use your savings account just like a checking account. All of this money is FDIC insured so you can rest at night knowing you are maximizing the return on your cash and are protected from the inevitable stock market correction.