“Hey Dad, do banks have more than one savings account option?”
Yes, some banks do, kids:
And this is something you need to keep your eyes on, on a regular basis. Some banks have multiple savings account options, with different Annual Percentage Yields (APY), deposit minimum requirements and balance requirements tied to them.
In June 2022, I opened a Capital One 360 Performance Savings account because they were offering a cash bonus for opening an account, as long as I left the money in the account for at least 90 days. The interest rate on that account was 0.698% at that time. That’s right, less than 1%.
I kept the account open, and fully funded for the 90 days, and received the bonus money directly into my account, as promised. At that point, the interest rate had increased to 1.687%. I decided to move the bulk of my money from that account to another online bank that was paying a higher interest rate on savings.
While discussing this transaction with a relative, they mentioned that the interest rate on their Capital One 360 account wasn’t as high as mine. “How can that be? They are both Capital One 360 Savings Accounts”. After further investigation, we realized that Capital One had “2” savings accounts, with similar names, but different interest rates. (Now that’s just sneaky):
· Capital One 360 Savings Account
· Capital One 360 Performance Savings Account
We immediately signed on to their Capital One online account and switched their savings to the higher interest Performance Savings account. Since then, Capital One has moved all existing Capital One 360 savings account customers to their Capital One Performance Savings account, which is their only savings account now. Their current APY is 4.30%, with no minimum deposit and no monthly fees.
As of 7/27/2023, CIT Bank, (not Citi Bank), has 4 savings account options:
Initially, I put my money in the CIT Bank’s Savings Builder account because, at the time, it was the highest interest yielding savings account in their portfolio. I transferred to Connect Savings when it was introduced in February 2021. I now have my money in the Platinum Savings account, which was introduced in April 2023, which is currently at 5.05% APY. Hey, if you don’t have $5,000 to deposit, you can still find quality online banks with a high APY and no or low minimum deposit requirements.
As of this writing, Capital One Performance Savings Account is at 4.30% APY, which isn’t bad at all. And there’s no minimum required balance. Or get 4.65% APY with a Savings Connect account at CIT Bank, with only a $100 minimum deposit requirement and no fees.
Online banks offer higher APY, since they don’t have the expense of “brick and mortar”. Find an online bank that best fits your needs and verify that they are FDIC insured. The point here is, don’t settle for 0.04% on your savings from any bank. Yields are so much higher now. Got questions? “Hey Alexa!”
Related Blog Posts:
Understanding the impact that interest rates have on your money is important. Whether you are saving or borrowing, you need to know if it means more interest earned or more interest paid. We explain.