How a business graduate discovered that your savings account is SCREWING you over...
Atticus Li
Conversion Rate Optimization (CRO), Growth Marketing & Product Marketing | $1B+ Client Acquisitions at SVB | Expert in A/B Testing, Digital Experimentation, UX, Acquisition, Retention & Revenue Optimization for Growth
Check your savings rate, AKA (Deposit Interest Rates & Annual Percentage Yields (APYs)?) from your bank!
They are SCREWING YOU OVER.
I was one of those students that are OBSESSED with their majors. I was always at office hours, and one day I went to my professor and asked: “why are people still putting their savings into these low-interest savings account when there are savings accounts that pay them a lot more?”
He said: “Because they don`t do the research, and they don`t know about it.”
?
Well, I found this out because of the weekend before meeting with my professor. I was researching everything about how to make my money work for me. After emergency funds (3-6 months of expenses), I like to put extra cash into savings accounts to fund my checking accounts and then park the rest into diversified portfolios of investments. I realized that traditional banking has been screwing people over year after year.
Check the data that I pulled from Bank of America and Bank Rate.
Online banking is convenient, and they pay you a higher % rate for keeping your money!\
Let`s look at a comparison.
Bank of America
"Standard Pricing
Account Balance Rate % APY %
Less than $2,500 0.03 0.03
$2,500 and over 0.03 0.03"
They pay you 0.03% for every dollar you put in.
Other banks pay you up to 2.4% for every dollar you put in.
Easy math:
You put $5,000 into a regular bank and with APY of 0.03% you get $1.5 / year. A DOLLAR AND 50 CENT. Moreover, THIS DOESN`T INCLUDE ALL THE EXTRA FEES THEY CHARGE YOU!
You put $5,000 into a high interest-bearing online account (Check Bank Rate and do your research, read the reviews) let`s say you get 2.25%, which is what I am getting with my savings account.
You get $112.5 per year.
$1.5 compared to $112.5
*These are not financial advice, but suggestions to make you think about in what ways are you getting screwed over. I only want to educate the public about finance so that they can make the system work for them instead of working for the system!
Check out: https://www.bankrate.com/banking/savings/rates/
Source for Bank of America Rates:
https://media.bac-assets.com/DigitalDeposit_NC_NC_Eastern.pdf?cacheBuster=2502