Every so often I switch savings accounts because I’m forever chasing the highest yielding savings account. Why let the big bangs fleece your interest from you? Haven’t they done enough already?
There was a time where I didn’t know what the interest was on my savings account. I was in college and just opened a bank account because I had moved and my local credit union didn’t exist at the college I was at. Funny enough, the big bank I signed up with had a higher interest than my local credit union back home. I thought I was getting a good deal! I’d find out later this was far from the case! Oops?
The first savings account I ever got in college was from a very large bank that everyone has probably heard of. I won’t name them here but my interest was something like 0.1%. Yes, it was laughable. I never got back more than a few dollars in a year.
7 years ago starting college I had to open my account in person. However, in the passing years, a ton of online banks have come out that are only online and I can open my account online in less than 5 minutes. That’s perfectly fine with me, because I basically never go to a bank in-person anyway.
FYI, the online banks offer you a much better return on your money, and they usually have better tech. Check out CIT Bank, since it was the highest return I could find at 1.85%, with just a $100 minimum.
The average return on savings accounts in the US is a measly 0.06%. Isn’t it insane how much the difference is?
Other banks with high-yielding, but still lower rates than CIT’s 1.85%:
- GS – 1.6%
- Amex – 1.55%
- Barclays – 1.5%
- Ally – 1.45%
- Discover – 1.5%
Notice how every one of these banks doesn’t have a physical branch in the US? Digital banks are the new wave of banks. Brick and mortar banks will never be able to offer a savings account with a high-yield. This is because of rent, in-branch employees, capex, etc which all cost brick-and-mortar branches a ton of money. That’s why you get your puny .1% interest. I’ll sit here with my 1.85% interest happily even if it means I can’t go in person to a branch.
1.85% CIT Bank Account
- $100 minimum to open – much less than other banks
- 1.85% yield, 31 times the nationwide average on savings accounts
- No fees
- Open your account in less than 15 minutes
After the initial sign-up, you go through a few disclaimers and legal documents before you fund your account. I made mine via electronic transfer, which means you transfer directly from another bank account you have at another bank. While the screenshot says it will be subject to a 5-day hold, mine was available in 12 hours after I verified my micro transfers.
They even prompt you to add a beneficiary! Earlier this year I had to go and add beneficiaries to all of my accounts because no one had ever asked me to put down beneficiary information.
I’ve also never had a financial institution make my make a username with numbers AND letters. It shows me they take their security seriously.
The first time you sign in, you’re also going to get a phone call to your cell phone and need to enter a 5 digit numerical code they provide. I like the 2 factor authentication they provide.
The bank is FDIC insured up to $250k for yourself and $500k for you and your partner if you’re married. Most people simply have 3-6 months of expenses in their emergency fund though. Set up your emergency fund properly and invest the rest for financial independence at your earliest.
CIT Bank does the standard 2 micro deposits and you verify them so that CIT knows you control the accounts you linked.
There’s an encrypted app so you can track your account on mobile.
Your Savings Account Is For Savings! Not Spending.
NOTE: You SHOULD NOT be dipping into your savings account/emergency fund unless it is an actual EMERGENCY. It’s there for security and peace of mind in case something catastrophic happens, not because you don’t have enough money for a coffee or pair of shoes that day.
If you’re ok with not having a brick-and-mortar branch for your savings account, take a look at CIT bank. You can do it online, and you won’t get as awesome yields with any other bank.
Stop letting the big banks fleece your interest away from your savings account!