If You’re Still Banking In-Person, It’s Time for a Change
TL;DR
If your money’s sitting in a brick-and-mortar bank account, it’s being eroded by inflation. Whether or not the Fed cuts rates later this year, you’re free to move YOUR money to any financial institution you want in order to take advantage of the best APY available.
This week, America celebrates Independence Day. And in the spirit of autonomy that the 4th of July instills in all of us, we’re dedicating four issues this month to ways you can improve your personal finances.
We’ve talked a lot about equity investing over the past few months, including a primer on over-the-counter stocks, foreign bank stocks, the surging popularity of exchange-traded funds and our last dividend stock of the month (which is currently yielding 5.99%).
We’ll get back to analyzing stocks and ETFs by the end of the month. But for the next few weeks, we want to look at some very basic moves you can do right now to improve your financial standing.
And today, that begins with ditching your bank …
A Lopsided Exchange
As of June 2024, the national average APY for savings accounts is 0.45%. For checking accounts, that already ridiculously low figure plunges to 0.08%.
Customers — for perceived convenience or simply indifference — leave their hard-earned money in those accounts. In exchange, the banks give your kids lollipops and provide you with insulting interest rates while they turn around and loan (too much of) your money to borrowers at rates 155.55x higher than what they provide you with.
F**k. That. Noise.
Deposits can now be made remotely. Loan applications are available online. And online-only banks often offer nationwide ATM networks if you, for some reason, refuse to admit that cash is dead.
So let’s take a look at the three highest APYs currently being offered by online banks and credit unions for high-yield savings accounts …
ufb Direct: 5.25%
ufb Direct is a division of Axo Bank that offers 24/7 access to your funds and a robust 5.25% APY for its high-yield savings accounts. The bank is FDIC-insured and receives an A+ rating from the Better Business Bureau (BBB).
Forbright Bank: 5.30%
As of July 1, Forbright Bank is offering a 5.30% APY. No minimum balance. No monthly fees. The full-service financial institution is a member FDIC bank and receives an A+ from the BBB.
Betterment: 5.55%
Betterment, of investment robo-advisor fame, has been around since 2008. The bank currently offers an industry-leading 5.55% APY for its high-yield savings accounts.
The bank is FDIC-insured and doesn’t charge monthly or maintenance fees … but to be eligible for the highest APY, there’s a catch. Customers can get the additional 0.50% APY (up from 5.05%) for three months if they make a qualifying deposit.
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