I'm Willing to Give Up $125 in Interest for This Reason

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KEY POINTS

  • Savings account rates are up these days.
  • While there are banks that are paying more than my current one, I've made the choice to stay put.

There's a reason I'm actively choosing to earn less money on my savings.

For years on end, people with money in savings accounts were bemoaning the pitiful amount of interest they were getting on their money. But all of that has changed over the past few months.

These days, banks are paying a lot more interest on cash being kept in savings accounts, as well as CDs, on the heels of aggressive Federal Reserve rate hikes. And so at this point, consumers have a solid opportunity to generate a far more generous return on the money they're keeping in the bank.

Like many banks, my bank has upped its savings account interest rate over the past number of months. But despite that increase, my bank isn't the most competitive one out there interest rate wise.

In doing my research, I've found a number of online banks that will pay me a little more interest on my savings. In fact, moving over to one of those banks could result in an extra $125 in interest for me over the course of a year.

Our Picks for the Best High-Yield Savings Accounts of 2024

APY
up to 4.60%
Rate info Circle with letter I in it. You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.
Min. to earn
$0
APY
5.00%
Rate info Circle with letter I in it. 5.00% APY for balances of $5,000 or more; otherwise, 0.25% APY
Min. to earn
$5,000
APY
4.25%
Rate info Circle with letter I in it. See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening.
Min. to earn
$0

But while I'd certainly like to have an extra $125, I've actually made the decision to keep my money where it is. Here's why.

It's all about sticking to my comfort zone

The online bank I keep my savings at is one I've been with for a long time -- over a decade, in fact. I'm used to the platform and find it easy to use, and I have many bills set up to autopay from my checking account, which is linked to my savings account.

As such, switching banks sounds like a hassle to me. And for $125, I'm not convinced it's worth the effort.

Now I should also mention that I'm self-employed, and when I have to take time out of my day to handle administrative tasks (such as making a switch to a new bank), I can't work. And when I don't work, I don't get paid. So I can make the argument that I might cost myself that $125 in lost work and wages by spending time initiating a bank account switch instead of staying put.

But if I'm being honest, the main reason I'm keeping my money where it's currently at is because I'm comfortable with my existing bank and don't want to deal with a change. Not only am I familiar with my bank's platform and app, but I happen to think my bank offers great customer service. If I switch banks, I run the risk of losing out in that regard.

Staying put for now

If interest rates on savings accounts continue to rise in the next few months and I see that my bank starts to really lag behind others in that area, then I might consider making a switch. But for $125 in the course of a year, it's just not enough of a financial upside to push me to make a change. And so I'm keeping my money where it is today -- even if that means losing out on some extra money in the process.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.

Two of our top online savings account picks:

Rates as of Jun 20, 2024 Ratings Methodology
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SoFi Checking and Savings Capital One 360 Performance Savings
Member FDIC. Member FDIC.
Rating image, 4.50 out of 5 stars.
4.50/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Rating image, 4.00 out of 5 stars.
4.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor

APY: up to 4.60%

APY: 4.25%

Min. to earn APY: $0

Min. to earn APY: $0

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