0.5% Interest on My Savings Account??? HELP!

December 26th, 2007 at 09:24 am

In lieu of my needing to tap my emergency fund to pay for car repairs, I called my bank to make sure that money would instantly be available in my checking account as soon as I transfered it to checking via online banking. They said it would be. Then, it popped into my head to check the interest rate on their savings accounts.

SHE SAID THEIR SAVINGS ACCOUNTS GET 0.5% INTEREST!

What!

0.5% interest??????

Is this normal? I was under the impression that interest rates should at least be 2%.

Posted in Banking | 12 Comments »

12 Responses to “0.5% Interest on My Savings Account??? HELP!”

kimiko Says:
December 26th, 2007 at 09:34 am

That's very normal for brick and mortar banks.
Ima saver Says:
December 26th, 2007 at 09:34 am

You should be getting 4% or more. There is a list of internet banks on this forum that all pay more than 4%. That being said, my business checking account only pays .05% but my money market account is earning 4.1% right now.
Linda Says:
December 26th, 2007 at 09:36 am

Actually 0.5% is quite common at regular banks. You'd get a better interest rate with a savings account at a credit union. You'll get an even better rate with a Money Market Savings Account (sometimes abbreviated MMA or MMSA), although you usually have to consistent minimum balance to earn the higher interest. If you fall below the minimum, you earn less interest.

The minimum balance for the MMA at my credit union is $2,500, and my interest rate is 3.08%. They also have "tiered" interest rates -- for example, if I keep a $10,000 balance in that account, my interest rate goes up to 3.58%; if I keep $25,000 in that account, the interest rate is 3.93%, and so on.

Good luck!
M E Says:
December 26th, 2007 at 09:37 am

I don't even think that my "brick & mortar" bank pays .50% . . . it's probably now closer to .25% @@

That is why I do all my saving (accounts) online!

ING pays 4% (or so)
HSBC pays 4.25%
Emigrant pays 4.25%

Not the largest amounts, but still better than .50% or less. :-/
collegemomma Says:
December 26th, 2007 at 09:49 am

Yep, that is a brick and mortar bank for you. My credit union isn't much better, which is why I only use it now for my automatic mortgage payments. It's 1%! Yikes! And 0.25% on my checking. So I have my "real" savings account with FNBODirect online. They had a special interest rate earlier this year at 6%, but it has since gone down to 5.05%. That is much better than most and they've done a fabulous job so far.
Caroline Says:
December 26th, 2007 at 10:34 am

My online bank gives me 4.78%, compared to Wachovia which I think is .25. Of course some online institutions will lose you a bit of liquidity (which is fine if you dont mind 4-5 days for you to be able to touch your money.) Right now I'm with iGObanking.com and I've been very pleased so far. Transfering money takes about 3 days and the account setup took about a week, mainly because of security reasons, which was very thorough. I've been very happy but with the recent federal rate cuts, banks have been cutting their rates also...so far my bank hasn't (crosses fingers) but other big names like ING, HSBC,and Emigrant has.
Englishteacher Says:
December 26th, 2007 at 11:21 am

Wow, thank you to everyone who responded. I'm still a bit shocked at the low interest rates. With inflation factored in, saving money is losing money at a brick and mortar. I've been considering online banking, but I'm a bit skeptical for some reason. That is strange considering that I am such a huge fan of doing business via the internet. Thanks again to everyone for the comments!
Broken Arrow Says:
December 26th, 2007 at 11:30 am

Yeah, it's normal, but not acceptable to me. I am getting 5%.
Joan.of.the.Arch Says:
December 26th, 2007 at 12:10 pm

That's right, it is like losing money when you consider inflation. As a teacher, are there any credit unions you are eligible for in your area? CU's can be a good place to get loans, too.
koppur Says:
December 27th, 2007 at 07:26 am

Mine was just as bad. I transferred it to an online account and now it is between 4% and 4.5% much better! Check out ING and Emigrant, they are the ones I use.
monkeymama Says:
December 27th, 2007 at 08:17 am

You don't know how many years we just didn't know better and had tons of cash earning less than 1%.

Online money markets offer great rates. & CDs and such. & you can transfer the money to/from checking easily enough when needed.

We make twice the interest now with 1/2 as much money, it seems.
baselle Says:
December 28th, 2007 at 10:47 pm

Yes, my WaMu brick and mortar bank savings account only earns about .25% - I tend to keep a little bit of money in that account in case I run a bit short ($100) during the month or in case there was a snafu with the paycheck.

I have an ING online account as my main savings/emergency fund. I also use Treasury Direct at treasurydirect.gov making an online T-bill ladder. T-bills of various maturities are currently running around 3% - they used to be 4.5-5% in the spring and summer.

I'm sure someone will give you an ING invitation to start you off - they make it a sweet deal.

EnglishTeacher

0.5% Interest on My Savings Account??? HELP!

12 Responses to “0.5% Interest on My Savings Account??? HELP!”

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