How To Transfer Money From Savings Into a High-Yield Savings Account
How To Transfer Money From Savings Into a High-Yield Savings Account
GoBankingRates.com
Young beautiful woman dressed in stylish outfit transferring money using online banking service on laptop computer connected to wifi.
Switching banks is a chore that requires you to update your information for all direct deposits, automatic payments, subscriptions and recurring transfers to linked accounts. You’ll be getting a new debit card, account number and routing number, and you’ll have to download and navigate a new and unfamiliar app.
That’s a headache — but for the first time in years, the juice might be worth the squeeze.
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Despite aggressive Fed rate hikes, the national average savings rate is still just 0.33% — but you can earn 10 times that or more by transferring your money to a high-yield savings account.
Look to Small Banks for Big Yields
When the Fed began raising its benchmark rate to tame inflation, some banks followed its lead and paid their depositors higher yields after years of paltry returns — but others did not.
Each institution sets its own rates, but according to the New York Times, one clear trend has emerged. Big corporate banks with a national or global presence have not raised their savings yields in any meaningful way despite the Fed’s action because they didn’t have to. The giants are flush with cash and simply don’t need to pay more to incentivize deposits. The little guys, however, aren’t so fortunate.
If your savings are languishing in a big bank, you’re probably earning somewhere between 0.01%-0.23%, which is their way of telling you they don’t care if you stay or go. On the other hand, smaller institutions and online banks want your business so badly that they’re willing to pay 3%, 4%, or — in at least one case — 5% to earn it.
It’s time to recognize their efforts.
Steel Yourself for the Switch
Changing banks can be a stressful situation even if you’re making a lateral move. But if you’re switching from a big corporate bank to a small institution — especially an online bank, where many of the best rates are hiding — you’ll have to prepare yourself for an entirely new banking experience.
Things to consider include:
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