You’re Missing Out On A Lot Of Money By Not Switching To A High-Interest Savings Account
Is your money doing the right work for you? According to Marcus by Goldman Sachs, Americans are losing out on $25 billion per year by not stashing their cash in high-interest savings accounts. That’s a lot of money being left on the table.
According to a recent survey by Marcus, 60 percent of Americans don’t know what the interest rate is on their savings account. Also known as APY (average percentage yield), this number is the amount of interest that you could be earning on the money you have saved. The survey also found that 56 percent of Americans didn’t shop around for a better APY when opening a savings account.
A good APY on a savings account is one of the first steps to getting financially healthy. According to a new report from the Center of Financial Services Innovation, only 28 percent of Americans believe they’re financially healthy. In fact, just 45 percent have enough money to cover three months’ worth of living expenses. According to the survey by Marcus, more than half — 56 percent — of respondents have less than $5,000 in their savings accounts. By switching to a high-interest savings account, that amount could grow month over month and year over year, helping more Americans become financially stable.
For example, if you were to save $1,000 in a traditional bank with the national average APY, and contribute $100 per month to that savings account, you’d only earn about $5 in interest by the end of the year. If you saved that same amount of money in a high-interest savings account, you could earn something like $32 in interest by the end of the year. Over time, that money will continue to grow, and having it in a high-interest savings account will grow it much faster than a traditional bank.
Ready to switch to a new, better savings account?
It’s easy and might only take a few minutes. Here’s how to make the switch:
- Open an account at your new bank.
- Electronically transfer the money into the new account from your old bank. You’ll need all account and routing numbers to do this. (You can also ask a representative at your bank for help through the process.)
- Download the new account’s app and make sure you can easily track your new account. Some high-interest savings accounts are online only, so you’ll want to be sure you know how you can access that money when needed.
Don’t worry about closing your old account. You can have more than one bank account at more than one bank. Just be sure that all of your accounts are functioning the way they should. Keep enough cash in your checking account to cover any automatic payments, and be sure to meet any minimum requirements so you can avoid fees.
Saving money in a high-interest savings account is the first smart step to growing your savings and preparing for your future. With very minor work, you can make the switch and grow your money in no time.
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