Most savings accounts actually pay you nothing. Or close to it.
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Your bank takes your money, lends it out, earns a return, and generally pays you around 0.01%. Meanwhile, inflation quietly eats away at your cash, leaving you with less purchasing power every year.
Banks love that you’re not paying attention.
Say you keep $20,000 in your savings account for emergencies.
At 0.01%, you’ll earn $2 a year. Meanwhile, that $20,000 will buy less next year than it does today, thanks to inflation.
Many online high-yield savings accounts are paying 4.00% APY or close to it right now. On that same $20,000, that’s $800 a year, for doing nothing but switching where you park your money.
Big banks know you won’t move your money easily. They’re using your deposits to fund loans and investments, making a solid return while paying you pennies.
And they’ll still hit you with “maintenance” fees or minimum balance requirements if you’re not careful, turning your “safe place to save” into a slow leak. If you’re looking to start earning more money on your savings, click here to visit our list of the best high-yield savings accounts and start earning more on your savings today.
You don’t have to settle for a savings account that pays nothing. Look for:
Opening a high-yield savings account online generally takes minutes, and you can often link it to your existing checking account for easy transfers.
I’ve spent years writing about personal finance, and here’s what I see over and over: Banks profit when you don’t pay attention. I know this because I used to be one of those people.
I opened a simple checking and savings account combo when I was a kid. I used those same accounts for way too long into adulthood until I finally learned how badly my bank was ripping me off.
Learn from my mistake: put your savings to work earning cash for you. Money makes money, but you have to know where to keep it.
Check out our list of top high-yield savings accounts you can open online today and start earning more on your cash without changing your spending habits. Your future self will thank you.
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