The longer it goes on, the worse it gets if you leave your hard-earned savings in an account which pays almost no interest.
It’s just easy to stay with the same old account and not look for other, better deals. Since shopping for a new account seems like the most boring thing to do. It’s easy to get lost in your daily routines and not be able to spend much time into planning what kind of account you will be putting your money into but not doing so could, in some cases, be as good as leaving money on a table.
Average savings account presently earns .10 percent, according to the FDIC, which is an absolute disgrace. Especially when we’re talking about the same old traditional savings account of the same old brick and mortar banks.
The situation can get worse the more you let it go on. When you put your savings in an account that barely pays any interests it can cost you money in the short-term and also over long-term as compound interest comes into play.
Work out how much money you might be losing
How much you are losing depends on how long you’ve been saving, how much you have already saved and how much you might be saving in the future
For example, If there is $25,000 in a saving account and not another cents is added into it for the next 10 years, it would only make $251.13 in interest with your average savings account, if compounded annually
On the other hand, if a new Savings Builder account from CIT Bank is opened so you can earn 2.30% APY on your nest egg. You would be earning a sum of $6,383.14 over 10 years in interest if you make no new deposits
A Big Distinction between the two amounts.
If you save less then your earnings will also be small, sure but the difference will still be remarkable. This is what could happen if you save $5,000 and pledge to keep adding $100 to your savings account every month.
If the interest rate is .10%, you will be earning %17,104.37 over 10 years.
And if the interest rate is 2.30% then you would have $19,597.96.
This is basically “free money” you would be earning if you decide to open a new account and redirect your money from the old account to this one. You don’t necessarily have to close your old account if you don’t want to, so there is no excuse.
It’s just in your favor to do this chore as soon as you can because the longer you want the more money you are at risk of losing.
Things to consider before opening a New Savings Account
It’s not as hard as you might think, opening a new bank account and when it comes to getting rid of earning not enough interest on the money you have worked so hard to earn, it does seem like an important thing to do, which it surely is.
You can do it at home, online. Several online banks have made setting up a new savings account, super easy. You can also monitor your savings online with these accounts and contribute money.
A High APR
One thing you really should keep an eye out is the interest rate these accounts offer. Many banks are willing to pay more than 2.0% APY given that you keep a certain amount of cash in the account. Different banks have different requirements, what you need to do is to keep an eye out for accounts that are offering more than 2.0% APY, this will make the struggle worth it.
Terms You Can Meet
It will be better for you if you go through the terms and conditions of all the types of accounts. Chiefly so you know the minimum deposit requirements. For instance, some accounts offer more than 2.0% APY if you can meet anyone of the two conditions. You are either asked to deposit at least $25,000 in your account that you will not be able to cash out for a certain period, or you have to deposit $100 into your account every month.
The choice is yours, whether you want to deposit a minimum certain amount only once or you want to deposit $100 every month.