When times are tough, saving money might be the last thing on your mind. However, thinking about where you keep your money could give your savings account a boost. Right now, your money might just be sitting in a bank.
Recommended Videos
KPRC 2’s Bill Spencer is looking into why you might consider moving your money to a bank that will give you back money from interest.
What is savings account interest?
If you use a traditional bank, you may not get any additional money for using its services. Savings account interest is when the bank pays you for keeping your money in an account with them.
This involves the annual percentage yield (APY) which varies by institution - but will be higher in a high-yield savings account.
Debbie Simpson sits at the kitchen table, tallying up just how much money—big money—she and her husband George have found out they could be making if they move their money from a traditional brick-and-mortar bank to one of those fast-growing but relatively unknown internet banks, paying far higher interest rates.
“Well, we cashed in the life insurance policy. And what we’re want to do now is we want to put it in some high-rate interest-earning things so that we have a little extra money. The goal is to get the most return that we can for the money that we’ve got, “Debbie said.
Both Debbie and George are U.S. Army veterans, both retired now. Their son Alex has clued us in that they could be earning thousands of dollars more a year in interest if they’d move a large portion of their money out of a savings account at a traditional bank like Chase, Bank Of America, or Wells Fargo and put it into an online savings account through an internet bank like Brio or Synchrony.
“Well, my son is a good investor, so he kind of started talking to us about how he was investing in the online banks. He uses Synchrony, a bank that offers a really good savings account that is offering 4.5%. I think that’s great considering that Chase, where we have our money is .01%,” Debbie said.
”To me, it’s a no-brainer, it’s free money,” Ted Rossman with Bankrate.com said.
According to Ted, with the Federal Reserve System hiking up interest rates so high over the past few years to curb inflation, that has led some banks to be offering the best interest rates in years.
He says right now, at a time when interest rates have skyrocketed on home mortgages, auto loans and credit cards, they’ve also spiked when it comes to bank interest rates.
So here now, are Ted’s top five highest earning bank savings accounts. All are internet banks.
1. The Brio Direct/High Yield Savings Account at 5%.
2. The Forbright Bank/Growth Savings Account, also at 5%.
3. The Axos Bank/Axos One Savings Account at 4.86%.
4. The Bask Bank/ Interest Savings Account at 4.85%
5. The My Banking Direct/ High Yield Savings Account at 4.85%
Compare those interest rates to what you will get on a traditional savings account, not a CD or an account where you are locked in for a year or two years or longer, and the difference is ridiculous, according to Rossman.
“Unfortunately, the big banks are offering next to nothing on checking and savings. We are talking 0% or .01% or .02%. Whereas these internet banks are offering much more because they have to, to survive. They compete on rates,” Rossman said.
It’s also important to know that these internet banks offer the same federal protection of your money that the big banks offer.
That is, they offer FDIC insurance on your money up to 250-thousand dollars per customer.
As for Debbie and George, after doing their research and checking different rates, they’re sold.
They will be moving a sizeable amount of their money into an account where they can earn far more money.
