The best guaranteed return is an online savings account. And the best online savings account today is with CIT Bank, specifically their Savings Connect account. It beats the national average savings rate by over 15 times!
The last time I discussed higher money market and short-term CD rates was before the stock market melted down in 4Q2018. We all know a lot has changed since then!
At the time, I was excited to see online banks raise their money market rate to ~1.85% and their 12-month CD rates to ~2.25%. If you invested in either, you ended up outperforming stocks by a whopping 10% – 40%, depending on which stock.
Further, you had plenty of peace of mind, which is the best thing ever during a downturn.
So of course, I decided to take my own advice on July 16, 2018 and lock up $100,000 in a 12-month CD paying 2.25%. I figured, if all else goes to hell, at least I'd have $100,000 left to my name to move my family to the boondocks and eat bugs and grass, yum, yum.
Note – Great news, CD rates in 2023 are significantly higher! Be sure to check CIT Bank today for the best online savings rates and the highest CD rates.
Best Guaranteed Returns: Online Savings
Well, I'm excited to let you know that I keep getting alerts from CIT Bank about higher rates rates. Their Savings Connect Account is by far the best paying savings account I've seen. In addition, CIT's Money Market Account rate is also competitive. It's been a long time since we've seen savings accounts paying this well.
For an even more attractive interest rate, check out the CIT Bank 18-month CD. It is the highest paying CD I've come across. As the Federal Reserve raises rates to dampen inflation, savings rates, CD rates, and Treasury bond yields are all increasing. Take advantage.
Earning interest in a savings account isn't going to make you rich overnight. But diversifying and putting a portion of your cash into low-risk interest earning accounts is better than putting all your eggs in one basket.
No-one wants to be 100% long equities during a drop like the 32% decline in March 2020 when I told readers to buy stocks.
Guaranteed Returns For 2023 And Onwards
For 2023 and beyond, I'm all about locking in wins by taking advantage of higher interest rates. And earning risk-free income with your liquid assets is a huge win.
We don't have to let the Fed or another unforeseen global event beat our risk assets up. At the very least, I've got a nice pre-retirement checklist for post-pandemic life.
Looking for other guaranteed return options besides high-yield online savings accounts? CDs and Treasuries are other great options. CIT Bank offers many types of CDs and has been my go-to bank for the highest rates. During the pandemic, rates were too low to get my attention, but they have since climbed back.
After the Fed's rate hikes, I also started legging into many treasury bonds in 2022 when rates became more attractive. You can learn all about how to buy treasury bonds here and pick up some smart strategies as well.
Preserve Capital And Secure Your Wealth
Take advantage of rising short-term interest rates and protect your wealth. Check out CIT Bank's Savings Connect Account account here. Each account is FDIC-insured up to $250,000 per person.
In addition to building a larger money market allocation all year, I'm also going to be aggressively paying down my mortgage that is set to reset. Earning a guaranteed return to preserve capital is always nice after such huge gains since the pandemic began.
Note, online rates are always subject to change.
Here are some articles for further reading.
- Banks With The Highest Savings Rate Post Rate Cut
- Best Free Online Financial Product To Grow Wealth
- CIT Bank Savings Builder: A Great Option For Your Tax Refund
About the Author:
Sam started Financial Samurai in 2009 as a way to make sense of the financial crisis. He proceeded to spend the next 13 years after attending The College of William & Mary and UC Berkeley for b-school working at Goldman Sachs and Credit Suisse. He owns properties in San Francisco, Lake Tahoe, and Honolulu and has a total of $810,000 invested in real estate crowdfunding. In 2012, Sam was able to retire at the age of 34. He spends time playing tennis, hanging out with family, and relaxing.