I'm looking to open my first savings account and had some questions on rate history and the frequency of changing institutions for better rates.

I'm currently considering 2 different banks (Ally or CapitalOne) and was wondering where I could find the history of rates offered for their respective accounts. Some Googling didn't come up with anything. I'd like to know if certain institutions tend to lure people in with higher rates just to slash them soon after.

My second question is about changing banks to get a better rate. To those of you that have had savings accounts for some time, have you ever hopped to a different bank for a better rate? If so, how many times and what frequency? Are you shopping around, say annually, for better rates?

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AdditionalAttorney t1_iuiomv8 wrote on October 31, 2022 at 4:58 PM

I’m not shopping around anually. Rates will change all the time. It’s not worth the hassle to me.

I also focus on not having excessive cash. Everything long term is invested, anything under 5 years and my emergency fund is getting rolled in to a i series bond.

So the value of the interest is get by switching for some small difference isn’t worth it to me.

TyrconnellFL t1_iuioyy1 wrote on October 31, 2022 at 5:01 PM

With online banks it’s not all that much effort to open new accounts and shuffle money around. For a big jump, like from Bank of America to anywhere, it’s worth it. The more money you have in savings, obviously, the more a difference in APY is worth.

I’ve done it, but less than 0.5% isn’t worth it to me. It is to other people. It’s individual! Differences pop up more in more volatile times, like right now.

Rates mostly track with the fed. I haven’t heard of any banks going down while rates are rising.

To me, the quality of the bank also matters a lot. I don’t want to get locked out of my account when I need money, I don’t want to fight with customer service forever, and I do want reasonably robust and functional services. All it takes is one problem because you can’t actually get your emergency fund and all the interest differences are eaten. I’ve found SoFi to have not the absolute best rates but close to it, and with reliably user-friendly website/app and accessible and responsive customer service, so I’ve stuck with mostly them even when their rates have lagged some of the other offerings slightly.

DontDoxMeDaddy OP t1_iuisvg4 wrote on October 31, 2022 at 5:26 PM

Yeah I figured as long as the Fed were raising rates, I wouldn't see a drastic drop in rates.

But doing some research on savings accounts in this sub, I've seen some people mention that they've had their bank introduce new account types with higher rates, while their rate gets quietly cut back.

I didn't consider really the customer service aspect. I would indeed be using this account as an emergency fund, and would hate to be locked out on a rainy day.

nozzery t1_iuit815 wrote on October 31, 2022 at 5:29 PM

Fidelity Cash Management Account. No ATM fees worldwide, no NSF fees, no Wire fees. If you buy SPRXX as your money market fund then you earn 2.95%, fully liquid. The rates go up with Fed rate increases, much faster than any bank/creditunion

DontDoxMeDaddy OP t1_iuivsd0 wrote on October 31, 2022 at 5:46 PM

0.42% as an Exp Ratio for SPRXX seems kinda high to me.

nozzery t1_iuiz1uh wrote on October 31, 2022 at 6:07 PM

2.95% is your earnings after removing the expenses already. 2.95% is better than you will find at any bank, and goes up automatically when the fed raises rates