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Some graduates do think money grows on trees

Graduates pose for a photo as they line up for the Baruch College Commencement Exercise at the Barclay's Center in the Brooklyn borough of New York City
Brendan McDermid | Reuters

New grads may be in for a rude awakening when it comes to the power of their paycheck for saving.

In a small recent survey from LendEdu.com, only 26 percent of college students correctly guessed that the average savings account interest rate is in the 0 percent to 1 percent bucket. To be specific, annual percentage yields on savings and money market accounts currently average 0.56 percent, according to Bankrate.com.

Forty-two percent in the survey think the typical consumer earns 1 percent to 3 percent on their money. Twenty-two percent thought it was 3 percent to 5 percent, 8 percent thought it was 5 to 7 percent, and a very optimistic 2 percent put the average at 7 percent or better.

The survey was limited to 455 undergraduate and graduate students from three unidentified, four-year colleges on the East Coast, so fingers crossed that's not a representative sample of college students' savings savvy.

Grads looking for a decent rate of return on a savings account will see some of the highest-yield options in online-only accounts, said Greg McBride, chief financial analyst for Bankrate.com. In that category, young savers could easily get 1 percent, or as much as 1.1 percent if they have more than $1,000 to stash away.

"Where you're going to earn 3 percent or more would be a high-yield rewards checking account," said McBride. But those accounts, largely available through community banks and credit unions, often come with a long string of qualifying hoops — including direct deposit, a minimum number of debit card transactions each month and electronic receipt of statements.

Account requirements and fees can ultimately be more important, especially for grads on a starting salary, said Odysseas Papadimitriou, founder of WalletHub.com. Look for an account that's free or has fees waived with a low minimum-balance requirement, and that allows you to easily avoid other charges.

"Rates are so paltry that even the best of the bunch would be wiped out with a modest monthly fee or ATM withdrawal charge," he said.