Looking for some extra cash? Try another savings account #notanad
You can earn more by switching employers, or you can also earn more by switching your savings account to a different bank.
Are you getting the most out of your savings account? Savers are increasingly turning to higher-yield accounts to boost their earnings. And it’s not hard to see why:
- Per Bankrate, the national average yield for a savings account (2022 end) is just 0.20% APY.
- But browse around, and you’ll discover rates like 3.3% by CapitalOne and Goldman’s Marcus and even 4.03% at Bask Bank.
What gives? Are these scams? Are they about to FTX 2.0 me?
Rest assured, these higher-yield accounts are FDIC insured — meaning that your deposits are protected up to $250K per bank in the event that the bank fails. This is in contrast to companies like FTX, which was not FDIC-insured.
So, why do some banks offer such low rates on their savings accounts? Because they can. Banks can offer higher rates to attract new deposits.
- But many larger established banks already have trillions in customer deposits.
- Why pay more to customers when banks already have their money?
Additionally, the record amount of savings from the COVID stimulus have given banks less incentive to increase their savings rates.
So if you’re stuck with a lousy 0.20% rate on your savings, it might be time to explore your options.