Are your interest rates increasing?
Have you looked at the interest rate for your emergency fund and savings accounts lately? These rates can change on a monthly basis. With interest rates increasing recently, it is important to check your own accounts to make sure your interest rate is increasing as well. When interest rates were lower, there was not much discrepancy in interest rates across different banks. Now that they are rising, I am seeing that a lot of the brick and mortar banks have not increased their savings interest rates to keep up with the online banks. In some cases, I have seen where the brick and mortar banks are offering new accounts with better rates without rewarding their existing customers—in other words, existing customers have to open the new account type and transfer their money.
What should you do?
What should you do? Wherever you have your emergency fund and/or savings accounts, look at the current rate you have for your specific account. Then find a site, such as Bankrate, where you can compare different banks and rates easily. See if your current rate is competitive and if it is not, you should consider opening a new account with competitive rates. Make sure there is FDIC Insurance and no fees.
Beware of withdrawal limits
Another thing to remember when moving your money around is that some institutions have limits on withdrawals from the account. If you have a limit imposed by the bank on how many withdrawals you are allowed, pay attention to that so that you don’t exceed that limit and have your account turned into a checking account. With so many free accounts available, you can have multiple accounts if necessary.
Financial Journey LLC is a registered investment advisor offering advisory services in the states of Florida, Alabama, Virginia and in other jurisdictions where exempted. Information provided is for educational purposes only and not, in any way, to be considered investment or tax advice.
