What advice do you have for someone looking for the best savings account right now?
Search out the highest yield from a FDIC-insured lending facility that fits your personality type. If you desire to go into a branch, find the best rates that have physical locations you can visit. If, however, you are ok using online only, seek out the best savings rates from FDIC-insured online institutions. Feel secure in your direction, even if it is not the highest rate possible.
What are the biggest/most common mistakes that people make when shopping for savings accounts?
I am seeing a lot of people being marketed a % and not realizing it is an APY, or annualized percentage yield. For example, they will see something that says 6% for 6 months' APY and not realize they will actually get 3% on their money.
Does it make sense for savers to consider local banks and credit unions in addition to larger financial institutions?
In my opinion, it is about convenience, as long as they are not putting more than the FDIC insured limit. If you prefer a local community bank with a branch, you can visit one; if you desire a larger institution, that is fine too. Savings accounts have become commodities like gas for your car. You want the best deal!
Is it a good idea to keep money in a savings account right now?
For your emergency fund, yes. Anything over that should be applied to your longer-term plan, whether that is paying down debt, investing for a longer-term retirement, or making larger purchases such as a home. Money markets and savings accounts hold more money than they have in history, which tells us many folks have moved out of stocks and bonds for the safety of savings accounts. The S&P is now up 19% this year, compared to a 5% savings account. Regardless of what savings accounts may be paying, continue to follow your long-term financial plan.