3 Signs Your Savings Account Is Bad, Even If It Has a High APY
The biggest concern for most people when purchasing a new savings account is a high Annual Percentage Yield (APY). This makes sense because APY determines how much interest you can earn over time. But this is not the only factor that matters.
Even if you have one of the highest savings account APYs, managing your money can become a nightmare if you address any of these three issues.
1. You are paying to keep your money there.
Most high-yield savings accounts are available through online banks, many of which do not charge any fees to maintain the account. However, there are a few things that may charge you if you don’t maintain a certain minimum balance in your savings account.
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Depending on fees and savings account balances, you could end up losing money over time rather than making it. In this case, a savings account is not worth having. Especially when there are so many high-yield savings accounts that don’t charge any fees.
2. You won’t be able to get competitive APY on all funds.
Some savings accounts try to offer high APY on a small portion of your savings (the first $5,000 or $10,000). You will then receive a much lower interest rate on the remaining balance.
If you have little savings, this may be right for you. However, if you have a large sum of money stashed away, it makes sense to keep that money somewhere it will earn you more interest. Find a savings account that pays a competitive interest rate on all your cash. As of March 2024, it’s not hard to find a savings account paying 4% APY or more.
3. Account management is difficult
These days, many Americans manage their money online or through mobile banking apps. But they are not all created equal. Glitchy or limited-featured apps can make managing your money difficult. And it gets even worse if your bank has poor customer service and doesn’t have a branch nearby.
If you find yourself in this situation, it may be a good idea to look for a bank with a highly rated mobile app. You can find out by looking at app reviews in the Apple App Store or Google Play Store and seeing what customers are saying.
Switching banks can be a hassle, but it’s worth it if it makes managing your cash easier and makes you a few extra dollars in the process. Take your time and research your options carefully before deciding on one.
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