I'm Cheating on My Bank and Making 3.90% APY on the Side

Since the whole internet is talking about that Coldplay concert… I guess it's time for me to make a small confession of my own…

I've been cheating on my big bank (Chase). I'm hiding a big pile of money and keeping it with a sleek little online bank on the side. What can I say, I'm a weak man. I still love my big bank… but I love interest more.

My side bank pays me 3.90% APY, and I've earned over $2,000 in interest the past few years.

Why I opened a high-yield savings account

All jokes aside -- big banks are great at many things. But paying interest on checking and savings accounts is not one of them. That's where high-yield savings accounts (HYSAs) come in.

A few years back I realized my savings account had an interest rate of 0.01%. And with my savings balance of over $20,000, that meant earning $2 interest per year. Ouch.

Meanwhile, I learned that online banks at the time were offering rates upwards of 5.00%! (Rates have fallen since then -- today's top HYSA accounts are around the 3.80% to 4.00% APY mark)

And although big banks like Chase, Wells Fargo, and BofA do offer savings accounts, they're typically pretty low APYs. In fact, right now the national average APY for all savings accounts is 0.38%. That's 10X less than what top online banks offer.

Here's what all these numbers mean in real interest, using a $20,000 savings balance at different APYs:

This is a common banking mistake, by the way. Many people keep long-term savings in a checking account because they don't realize better rates exist elsewhere (or maybe they just don't care about free money?).

What online banks actually offer (besides better rates)

Online banks are just as safe and legit as the big-name banks most of us grew up with. They're FDIC-insured, fully regulated, and offer most of the same services.

But since they don't have to pay for branches or tellers, they can pass the savings on to you and me in the form of higher interest rates, no fees, and sleek digital tools.

Here's what I've come to love about most online banks:

• No monthly maintenance fees
• Easy mobile apps with clean design
• Budgeting tools and savings goals baked in
• ATM access via big networks or fee reimbursement
• FDIC insurance, just like a traditional bank

Some tools even let you link investment accounts so you can manage all your money under one dashboard.

For me, my side bank gives me everything I had before… plus more interest and fewer fees.

Why I haven't fully left my old bank

I still keep my checking account at my original bank. It's connected to my direct deposit, auto-pay for credit cards, and I still have a mortgage with it also.

But I treat my online savings account as my "side stash" emergency fund. I keep about $25,000 there, and transfer a little in and out as I need to pay for bigger bills or things.

Moving money is super easy actually. My banks are connected on the back-end so I can request money transfers with either app, and they happen within a day or so.

That's the system that works for me. And I encourage anyone thinking about switching banks to run with both for a while. Try out the new bank fully before moving your whole life over.

Don't settle for low interest

If you're comfortable with your current bank, awesome. No need to make it awkward.

But there's no rule that says you can't open a second account and earn more elsewhere. That's what I did and the difference is thousands of dollars.

Ready to grow your savings faster? Earn 3.90%+ APY with one of these top-rated online banks.