3 Steps to Take if Your Bank Isn’t Paying You Enough Interest

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Interest rates have been in the news a lot lately thanks to the cost of borrowing getting more expensive. Yet there’s another reason interest rates have been dominating the headlines. When the Federal Reserve increases the federal funds rate to fight inflation, many banks end up paying higher interest rates to their customers. 

Some banks are offering higher annual percentage rates (APYs) than others, so many consumers are evaluating whether they’re banking with the best financial institution for their needs. If your bank isn’t paying you enough interest, check out these three tactics might help your savings reach its full potential.

Recommended High-Yield Savings Accounts

Bank Account	APY	Features	Learn More
BrioDirect High-Yield Savings Account Open Account	4.85% More Info *Annual Percentage Yield (APY) is variable and is accurate as of 11/15/2024. Rate is subject to certain terms and conditions. You must deposit at least $5,000 to open your account and maintain $25 to earn the disclosed APY. Rate and APY may change at any time. Fees may reduce earnings.	$5,000 min. deposit No monthly fee	Open Account
Axos ONE® Savings and Checking Bundle Open Account	Up to 4.86% More Info Earn up to 4.86% APY on savings, and 0.51% APY on checking when you meet requirements.	No minimum deposit No monthly fee	Open Account
SoFi Checking and Savings Open Account Member FDIC Member FDIC	0.50% - 4.00% More Info SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi members with direct deposit are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.	No minimum deposit No monthly fee	Open Account
CIT Bank Platinum Savings Account Open Account	4.55% More Info Earn 4.55% APY on balances over $5,000. Balances of less than $5,000 earn 0.25% APY. Annual Percentage Yield is accurate as of November 13, 2024. Interest rates for the Platinum Savings account are variable and subject to change at any time without notice.	$100 minimum deposit No monthly fee	Open Account

1. Compare Rates and Switch Banks

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If you’re trying to earn higher interest rates on the money you have in savings, it’s a good idea to research the rates other financial institutions are offering their customers.

According to the Federal Reserve, the average APYs in October 2023 were:

• Savings accounts: 0.46%
• Money market accounts: 0.65%.
• Certificates of deposit: 0.22%-1.79% (depending on term length)

However, many of the best online banks and other financial institutions offer interest rates that far exceed the national average.

The right account for you depends on the APY, but also on your financial needs:

• Best CDs: Great if you know you can lock up your funds for a set period of time in exchange for a fixed interest rate
• Best high-yield savings accounts: A good fit if you want flexibility to withdraw money from time to time and don't mind if the APY fluctuates
• Best money market accounts: A nice option if you want a mix of high APY and some benefits of a checking account.

The interest rates a bank or credit union offers aren’t the only details to pay attention to when you’re considering a new account. also review fees, customer service and other features.

2. Open Accounts at Multiple Banks

Changing financial institutions can be an involved process, especially if you have direct deposits scheduled or automatic payments scheduled to creditors. Thankfully, switching banks isn’t your only option when it comes to finding low-risk ways to earn more money on your savings. 

You could consider opening accounts at more than one bank to increase your earning potential. This solution might be a good fit if you want to earn more interest on your savings but aren’t ready to completely change your banking setup. 

Keeping cash in more than one bank has other potential advantages such: 

• Avoid the temptation to spend your emergency fund when you keep your savings at a different bank. 
• When you choose safe banks that are members of the Federal Deposit Insurance Corporation, FDIC insurance covers up to $250,000 of your deposits (for each account ownership category) at each bank you use. 

3. Consider Alternative Saving Strategies

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A third strategy is to switch up your saving strategies. Don’t assume that just because you’ve saved your money a certain way in the past that your previous approach is necessarily the best option. For example, many people are used to keeping their cash in a traditional checking or savings account.

If you fall into this category, you could consider branching out to open one of these account types:

• High-yield savings accounts: Typically found with online banks, these accounts have the potential to earn a lot more interest.
• Money market accounts: Some offer high APYs, along with some of the benefits of checking accounts.
• Certificates of deposits: If you can afford to lock away some of your cash for a few months or longer, CDs offer fixed interest rates and low-risk APYs.
• CD laddering: And if you’re worried about missing out on potentially higher interest rates in the future, you could give the CD laddering savings strategy a try. 
• Investment accounts: If you’re saving for long-term goals like retirement, thoughtful investing is often a good approach to growing your nest egg. But you may want to consult with a trusted financial advisor for guidance on how to set up a diversified portfolio to best suit your needs. 

Related Article

Best High-Yield Savings Accounts (December 2024)

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Bottom Line

Whether you’re keeping cash in the bank for emergencies or you’re saving for short-term financial goals, it’s wise to make sure your money is earning the most interest possible. It can take a bit of legwork to switch banks. However, if you have a decent-sized savings balance (or you plan to grow one), changing banks or opening an additional account that offers a generous APY could be well worth the effort in the long run.