Why settle for 0.01% on your savings when you can do better? 

At today’s rates of 4%, $50,000 would earn an additional $2,000 per year.

Recently, I advised three of my financial wellness clients and two friends to move their idle cash into an interest-earning account. Their potential gains were significant, up to $48,000 more per year!  

It seemed like a no-brainer, who wouldn’t want “free” money?  Plus, I knew these extra earnings would help accelerate their financial goals that we had previously discussed.  

Yet, only three out of the five made the change.  Why?

  • Status quo bias?  We have a behavioral tendency to prefer things as they are, even when a better alternative exists.
  • The effort wasn’t worth the reward, they believed their time was more valuable than the interest they’d gain.
  • They didn’t fully trust or understand the opportunity.
  • They didn’t take the action immediately, weren’t in the financial wellness program, and have since forgotten about it.

I am not sure why they didn’t all make the change, but I do know why I had not yet made the change.  I was so focused on researching cash management solutions for others that I forgot to share my research with my wife.  I’ve since corrected my mistake and we are in the process of closing our Discover online savings account, and zeroing out our Schwab checking account.

This move will earn us an additional $871 per year from $15,000 in checking at an additional 4.09% and $35,000 in savings at an additional 0.39%.

If you are ready to break free from the status quo and optimize your cash management, below is a list of popular bank accounts and money market funds.  Click on the account name to check current yields, as ETF-linked rates fluctuate with the market and banks adjust rates at their discretion.

My recommendation, pay a small fee to capture market rates instead of relying on a bank’s goodwill.  Based on my research, aside from Bask Bank, whose rate I estimate to move lower soon, your best options for cash are money market and treasury bill funds.

Ticker/Account Fund/Bank Name Expense Ratio Yield
Savings Bask Savings Account 0 4.35%
SNAXX Schwab Value Advantage Money Fund 0.19% 4.33%
SGOV iShares 0-3 Month Treasury Bond ETF 0.09% 4.28%
BIL SPDR Bloomberg 1-3 Month T-Bill ETF 0.14% 4.19%
VMVXX JPMorgan Prime Money Market Fund 0.48% 4.15%
SNVXX Schwab Government Money Fund 0.34% 4.10%
NOGXX Northern US Government Money Market 0.35% 4.08%
SPRXX Fidelity Money Market Fund 0.42% 4.07%
AFAXX American Funds® U.S. Government Money Market Fund 0.51% 4.01%
Savings Marcus Bank 0 3.90%
Savings Ally Bank 0 3.80%
Savings Discover Bank 0 3.75%
Savings Citibank $4.50/month 3.73%
Savings Capital One Bank 0 3.70%
JNSXX Edward Jones Money Market Fund 0.71% 3.10%
Savings Truity Credit Union 0 0.10%
Savings Advancial Credit Union 0 0.10%
Savings Sandia Laboratory Federal Credit Union 0 0.10%
Savings U.S. Bank $5/month 0.05%
Checking Schwab 0 0.05%
Savings Santandar 0 0.03%
Savings TD Bank 0 0.02%
Savings JPMorgan Chase 0 0.01%
Savings Bank of America 0 0.01%
Savings Wells Fargo 0 0.01%
Savings First Bank 0 0.01%
Savings PNC Bank 0 0.01%

If you want the interest but are worried about losing features like bill-pay or debit cards, stay tuned.  I’m working on a post about the death of traditional savings and checking accounts and will share more about their replacements.