Switched to a high yield savings account for my emergency fund and wish I had done it sooner

I moved my $3,000 emergency fund from a regular Chase savings account (0.01% APY) to an Ally account that was offering 4.25% APY back in March. After 6 months I earned about $63 in interest compared to the maybe $1.50 I would have gotten at Chase. It took me maybe 20 minutes to set up the online account and link my checking. My only regret is not reading about how FDIC insurance still covers these online banks. Has anyone else made this switch and seen a big jump in their interest earnings?

2 comments

2 Comments

the_laura17d ago

I actually read this article on NerdWallet about how people are leaving millions on the table by using traditional banks. They said the average person could earn an extra $600 a year just by moving their emergency fund to a high yield account like Ally or Marcus. That really stuck with me because I was in the same boat with my old credit union giving me 0.05%. Made the switch to a 4.00% account at Capital One and saw $45 in interest over 3 months on a $4,500 balance. It is honestly wild that we put up with those tiny rates for so long.

riley_taylor16d ago

Yeah that's exactly what happened to me too. The extra interest really adds up without any extra work once you set it up.