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Are You Losing Money on Your Savings?

For most of us, the bank where we have our checking account is the same bank where we keep our savings. You know you are earning only a little interest, but hey, it’s better than nothing! We tend to keep our emergency fund and other savings there because it’s easy and convenient. But, are you losing money on your savings?

My husband and I were like that. We had both checking accounts and savings accounts at two different banks. We had equal amounts of money in both savings accounts and noticed there was a slight difference in interest we were being paid. One bank paid the interest quarterly and was about the same amount of interest we were earning in one month at the other bank. But it was easy and convenient to just keep the money where it was.

Then we started this website and ramped up our research into savings account rates and realized we had been missing out on earning waaay more money in interest. Now we kick ourselves for all the money we could have earned! We switched most of our savings over to an online savings account and earned more interest in one MONTH than we earned in one YEAR at the two other banks COMBINED. We highly, highly recommend you switch your savings account NOW if you haven’t done it already.

Here are a few of the banks paying the most interest on savings accounts, as of today:

  • Synchrony Bank: 1.05% APY. Minimum opening deposit is $30 to avoid $5 monthly service charge. No minimum daily balance required to earn APY. No monthly service fee if you keep a $30 minimum balance. Member FDIC.
  • CIT Bank: 1.05% APY. Minimum opening deposit is $100.  No maintenance fees. No minimum daily balance. Member FDIC.
  • Ally Bank: 1.00% APY. No minimum deposit to open. No monthly maintenance fees. Minimum to earn APY is $0. Member FDIC
  • Discover: 0.95% APY. Minimum opening deposit of $500. No minimum balance required. No monthly maintenance fee. Member FDIC.
  • Capital One 360: 0.75% APY. No fees and no minimum balance required to open or keep an account. Member FDIC.

You will notice the APY (Annual Percentage Yield) on these accounts are from .75-1.05%. Most traditional banks have an APY of around .01%. That is a huge difference. And you are the one losing out.

Ally Bank has a reputation as the best online bank and one many money managers recommend to keep your savings in. Their rate is not a teaser rate and one you can trust to be consistent. All of the banks listed above have non-teaser rates and are banks you can trust.

Other banks to consider that aren’t listed are American Express (0.90% APY), Mutual of Omaha (0.85% APY), and Barclays (1.00% APY). There are others with teaser rates of up to 1.60%, which then go down to a different rate after 6 months. You can get a list of current interest rates at Bankrate.com.

When researching a bank that is best for you, look at minimum opening balances, minimum balance requirements to earn the high rate and to avoid fees, whether it is a teaser or everyday rate, and make sure they are FDIC insured. In addition, make sure you can access your money when you need it. It’s easy to open online savings accounts by transferring money from your current account electronically. While they usually put a hold on the money for a few days when you get started, after that you can sit back and make up to 100x the interest you were earning before. We loooove seeing our monthly statement and how much interest we now earn!

These interest rates are subject to change after you open your account, of course, but these rates have been remaining pretty steady for months. You can’t go wrong with any of these banks.

So what are you waiting for? Stop losing money on your savings! Put your emergency fund, and other savings you need easy access to, into a savings account that pays you while you sleep.

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Written by Lisa Jennings

Lisa has been helping people create budgets and get their bank accounts in order for over 15 years. As a conference speaker and presenter at financial events, Lisa enjoys helping people get their finances under control. You can reach her at lisa@bankscoop.com.

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