Thursday, 28 December 2023
by Earn Media
Do you have cash sitting in a bank account that’s earning near-zero interest? If you can do one thing for your personal finances before the end of 2023: open a high-yield savings account.
Too many bank customers are effectively losing money by missing out on higher APYs. According to FDIC data, as of Dec. 18, 2023, the national average bank savings account was paying only 0.46% APY. If you had $10,000 in a savings account that paid the national average APY, after one year you would have… $10,046.
That’s terrible! You and your savings deserve better than to put up with near-zero interest rates. Move your cash to a higher-yielding account. Earn interest. Make your money work harder for you.
Let’s dive into a few more details about why this one year-end financial move is so important.
During the past several years since the Great Financial Crisis of 2008, America’s financial system was in a long stretch of low interest rates. This allowed banks to get away with paying lower yields on savings accounts and certificates of deposit (CDs).
After so many years of ultra-low interest rates, many people might have forgotten that savings accounts are actually supposed to help your money grow. But during 2023, as a monetary policy response to high inflation, the Federal Reserve hiked interest rates fast and furious. This led to higher bank savings account APYs than we’ve seen in a long time.
The good news is that, as of December 2023, the best high-yield savings accounts are now paying 5.30% APY.
Getting a higher yield on your savings account can make a meaningful difference to all kinds of savers, no matter how much money you have in the bank. Let’s look at a few different savings account balances, and how they’d benefit from a higher APY.
Here’s why we chose the numbers:
Here’s how much each of these savings accounts would earn after one year with the national average APY compared to a high-yield savings account:
|Savings account balance
|National average savings account (0.46% APY)
|High-yield savings account (5.30% APY)
As you can see, moving your money into a higher-yielding savings account can make a big difference. If you want your money to grow, get it out of the near-zero average bank savings account, and go get a higher APY.
Many Americans don’t have much money in the bank. Our Motley Fool Ascent survey found that 41% of Americans have less than $500 in savings. If you don’t have a big savings account balance, you might wonder if it’s worth getting a high-yield savings account. Our survey found that, when asked why they hadn’t moved money to a higher-yielding account, 35% of people said “I don’t have enough savings for a higher interest rate to matter to me.”
Life is hard when you don’t have enough cash in the bank and you’re living paycheck to paycheck. But even for people with near-zero savings, a high-yield savings account is still worth getting. Here’s why:
Bottom line: The best high-yield savings accounts are now offering APYs of up to 5.30%. Anyone who has cash in the bank, even just a few hundred dollars, deserves to earn interest on their savings. Don’t put up with shabby treatment and low APYs from banks. This year, go get some yield. You, and your savings, are worth it!
Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you 11x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2023.
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