15 thoughts to “Not Every Savings Account Is Created Equal”

  1. Great post! I’ve fought with my Mom about this for years to try to get her to be smarter with her money, but as you say, change is hard. I’m fortunate to have a great credit union that gives even slightly better rates than Ally or Alliant.

    1. I also have better luck with a credit union. I was shopping around for better APYs a few months back, and I should’ve started by checking new account types at the one I already had my accounts at. When I looked into it, they were offering a new 2.0% APY checking account and I just upgraded my existing account. Easy feckin peasy, I’m so glad I looked into it!

      (I’ve never particularly needed to have my savings out of sight and out of mind, I’ve had my emergency fund in my checking account for ages, anyway. I do realize there are people that option just wouldn’t work for, though.)

  2. My one hesitation with things like this is how long it would take to transfer to my checking account in an actual emergency. Right now, my checking and savings accounts are both with the same bank, so if I need that money NOW, I can get it into my checking account immediately anywhere there’s an internet connection. My understanding is that an online bank would take a couple business days to transfer that over. I can think of a couple situations where, if an emergency arose on a Saturday, and you weren’t gonna see that money until Tuesday, you would be pretty screwed.

    I’ve also had times when I’m planning a trip pretty far in advance, so I can keep my eyes open for deals and fare drops. Then, when something hits, I can transfer money out of my savings account right away to take advantage of the deal. When it comes to airfare, a 2-4 day wait could mean paying a lot more.

    I have a pretty low limit on my credit card (I only got my first one 6 months ago), so I couldn’t really do a credit float in either situation.

    1. Options:

      Shop around for the best local bank/credit union. We have our checking and quick access savings at Capital One (the brick & mortar version). That savings earns .5% which isn’t too awful.

      Keep “quick access” savings at your regular bank, but the bulk online. For example, if you have $10,000 savings, you can keep $2000 at your current bank, if that’s enough to handle the instances you mention above – like a travel deal.

      What has your local branch done for you lately? Maybe you can go full online and take advantage of online checking perks along with a higher savings interest rate. We made the switch to a local bank a couple of years ago and have found that it has added almost no value over our online bank .

    2. Having my savings at the same bank as my checking was the worst setup for me. I was constantly using savings as an extension of my checking account. No bueno. I moved my money to a local bank across town, turned down an ATM card, and only allowed incoming transfers. If I wanted to take money out of savings I had to go to the branch and do it. It helped keep my grubby paws off the money. Interest rate was crap though. I moved my primary savings to an out of state bank and am now getting .4% which is decent. I love seeing those $5-$6 interest deposits every month.

  3. I’m an savings interest shopping whore. I’ll move my money at the drop of Jayne’s cunning knit hat if I find a higher interest rate! I love Ally though. They’ve mysteriously raised my rate TWICE in a couple of months time.

  4. I spent almost a year stashing money in my bank account towards a downpayment on a home before I finally wised up and put in into an online bank account. I’m now getting 1.7%. I miss the money I could have had…but I’m glad that it is earning interest now, at the very least.

  5. Great post! I checked my brick and mortar bank and for all of 2017, they proudly boasted a return of $0.27. I opened an account with Ally today and am excited to see it grow.

    1. Wow, twenty-seven whole cents! What a windfall…
      Thanks so much for commenting, dearie, and for wine and za the other night. You mean the world to me!

  6. This post is the reason I opened an Ally account (that and they just upped to 2.2% APY! I wasn’t expecting them to raise it from the 2% I started at, and I’m super pleased) and I’m working on closing my brick-and-mortar chain bank savings (.01%?! An Insult!!!). That $5 something a month feels pretty good and hopeful.

  7. This post was super helpful, and I’m looking at moving my savings from my standard savings account with Amalgamated bank.

    A question: how often do APY’s change or drop? The fine print for most of these accounts include a disclaimer such as, “Keep in mind, this rate is variable and may change after the account is opened.” It sounds like Ally has only gone up — but how mindful do I need to be of a APY drop? Is it common that they’ll drop from 2.2% after a year? And if they do, is one solution to just march my money right out and into another high-yielding account?

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