High yield checking/savings accounts

[Duckhunterbrad]

Is it really worth opening new accts to gain an extra quarter point? Do the math. The difference probably won’t even buy you a sammich. Any decent bank or brokerage firm you are already doing business with should offer competitive options.

My local bank does not offer competitive rates at this time, and the balance will be well into 6 figures so every .25% does matter.

 

[z987k]

Fidelity has a cash management account that is the best in my opinion.

Pros:
-Core position SPAXX (Money market fund, pays market rates, currently 3.32% and often higher than HYSA) or a high interest position (lower, not as competitive, 1.84% FDIC insured)
-Comes with a debit card
-No fees, lots of flexibility, no minimums, etc.
-Can deposit cash back from the fidelity 2% cash back card directly into this account
-ATM reimbursement

Cons:
-It’s a money market fund, so you could theoretically lose money. The competitive interest rate position (SPAXX) is not FDIC insured

Otherwise, I use Ally and Capital One. They’re fine. Sofi is good too. I like Ally’s “buckets”, it really helps us keep track of savings goals.

Picking any of these is a great choice, and you’ll get competitive interest rates without bank hopping. Capital One is my least favorite out of what I’ve tried and opened. Just not a lot of features.

Ally does have withdrawal frequency limits- 10/month. Kinda annoying if you use it for more than long term goals with occasional transactions, but that is how many use HYSA’s anyway. I’ve come up against it a few times when spending for certain goals happens heavily in one month.

The Fidelity account is SPIC insured though. Which for most people is effectively the same thing.

 

[SDHNTR]

For me yes.

My CU offers 5% on the first $2000. After that it drops off A LOT.
So I have $2000 making 5% and a lot more making 4% in Betterment

Interesting. You guys should consider consolidating to a larger bank/brokerage firm that offers better wholistic options. In this day and age, the last thing I want is another internet portal to manage. Not to mention another 1099 to keep track of.

 

[SDHNTR]

The Fidelity account is SPIC insured though. Which for most people is effectively the same thing.

FDIC and SIPC are dramatically different.

 

[z987k]

Ally used to be my go to. Haven’t checked lately though to see their rates.

It's 3.3% right now.

Capital One is currently 3.30.

You can also just put it in a brokerage account in SPAXX. It’s generally slightly higher than most HYSA.

Also, some brokerages allow you to buy Tbills through them. You can roll money through those and they are exempt from state taxes. If you do a large amount of money, that can save you a bunch, depending on your states taxes.

If you live in a state with no income tax, the t-bills don't really get you anything the HYSA/MM account don't do with more liquidity.

There's also muni bond options to knock out the federal taxes. Turns a rate that is right there with the HYSA into effectively a 5+% rate.

 

[z987k]

FDIC and SIPC are dramatically different.

They are, but for someone holding 50k in SPAXX, it's not going to matter.

 

[CorbLand]

My local bank does not offer competitive rates at this time, and the balance will be well into 6 figures so every .25% does matter.

The difference between .25% on 100K is 250 per year. Divided out to a monthly that's a little over 20 bucks. Depending on the amount and the length of time, it really can be pretty negligible in the amount gained. That not even taking into account taxes if applicable.

Also remember that every account you have open earning you money is one more place to remember you have it, one more password, one more tax document.

I am all for people making the most money and doing what is best for them but SD is not wrong that a .25% sometimes really isn't worth it.

It might be worth thinking about and it may be worth thinking about moving everything to a bank/CU that provides you with more comprehensive options. I switched banks and consolidated money to less places. Taxes this year were far far easier.

 

[Wheels]

I have a couple HYSA’s one with Openbank at 4.09% and one with Neighbors Bank at 4.2%. If you have Verizon wireless they will give you a $15/mo credit if you have an Openbank account. Both accounts are not introductory interest rates like a lot of banks will offer for 3-6mo and then drop off.

 

[thegrouse]

I use a HYSA locally just to access cash same day if needed. Anything else I use a Schwab MM for short term needs.

 

[Zak406]

Sprxx on fidelity.

I checked last week I think it’s 4.20 per every thousand

 

[resident vs nonresident]

I have a couple HYSA’s one with Openbank at 4.09% and one with Neighbors Bank at 4.2%. If you have Verizon wireless they will give you a $15/mo credit if you have an Openbank account. Both accounts are not introductory interest rates like a lot of banks will offer for 3-6mo and then drop off.

Came to mention this.
Openbank at 4.09% right now. I think when I started with them it was 4.75% but everyone’s rates came down in last 2 years

Will have to check out Neighbors bank