Earning Interest At The Bank
I learned the hard way you have to shop around
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I’ve had a savings account at my bank for almost a year now. That’s where I keep the money I’m saving for a new vehicle. I figured, might as well earn some interest on the money, right?
Then as cash started piling up at my house to go towards my year of retirement I thought it might be a good idea to go open up another savings account to put it in. So I went to my bank.
The lady who helped me couldn’t have been nicer. As she entered my information into the computer I asked, “What is the interest rate for the savings account?”
I will never forget the look she gave me.
I swear she cringed.
“Right now it’s at .01%.”
My jaw dropped. I asked if she was serious and she nodded. Then I asked what the interest rate was for a money market account since I’d heard those tend to have much higher interest rates.
I got another cringe.
Want to guess what it was?
.05%
I groaned knowing that it was pretty pointless to try to earn anything in interest, but I’d still rather it be at the bank than at my house so I went ahead and opened the account.
Two days later I had the day off and was sitting watching a YouTube video. It was one of those “cash envelope stuffing” videos and something peaked my interest. The woman in the video was explaining how any time she got more than $20 she’d put it in the bank to get the 2% interest.
What?
There’s a bank that has a normal savings account that pays 2% interest while my two are earning a measly .01%?
Yup.
Ally Bank.
I was familiar with them because my old car loan was through them. I looked it up and found it to be true. Not only are they right now giving 2% interest (which does vary), but within the savings account, you can create up to 10 buckets (I think).
That means I can separate what I have in the account depending on what I’m saving for. This is exactly what I was looking for. Now I can have my car savings, retirement savings along with vacation, Christmas, emergency all broken up so they aren’t lumped together.
Now, you may not want to go with an online bank and that’s okay. My main point to this post is to tell you to shop around. I didn’t realize what a big difference the going interest rate could be from one bank to another. If you want you money to work on its own, do some research and go with the bank that will allow you to make that happen.
If you know of any other good banks, drop them below so others can look into them!
