Does it makes since to switch banks for savings yields?

Question

Does it makes sense to switch to a different bank for the interest the savings is yielding? The credit union I am with yields only a .30% APY. I have seen online banks that yield 1.5% APY. In terms of compounding and having a safe place to park liquid cash. Would this be a smart decision or not smart to swap?

Chris Pohlson · Answer

@Ethan Schneider As long as you're under $250k it absolutely makes sense.  Can't lose it and you get a better return...no brainer.

We did the same thing you're talking about (I was a branch manager for our credit union and still opened the online savings).

It has worked out great for us.

Fradel Schaechter · Answer

I now use Discover bank online saving account. the yield is just over 1% now. (maybe 1.14%)

Sure beats where I started out at 0.01% in chase savings account!\

One reason that I love this place for my money is that I can easily open multiple accounts and nickname them (money being saved for a down payment, money being saved for a vacation, etc.) and easily transfer from my checking account and between accounts at the click of my mouse. The rate is not the highest possible, but it is slowly rising. (it was at .95% when I started with them about a year ago)

Good luck, and having a saving account is a great step that many people miss, so good for you!