How much interest are you earning in your Savings account?

By on March 22, 2013

Earlier this week I got a letter in the mail from a Chase Bank branch manager attempting to get me to signup for one of their savings accounts. In the past, Chase has actually sent me some solid checking offers, so I was pretty excited to see this one. So what did they do to entice me this time? They offered me $150 cash back after I made a $10,000 deposit within the first 90 days of opening the account. Now first I thought to myself, that isn’t too bad (though I much prefer a no minimum deposit and no fee savings account). I scanned the rest of the letter looking for the APY (Annual Percentage Yield), because I consider that THE main selling point for any savings account. Low and behold, I found it in tiny italicized print at the VERY BOTTOM of the letter, AFTER the branch managers signature. Can you guess what it was?

0.01%

Now, many of us are aware that APYs are not what they used to be compared to 20 years ago. But this is ridiculous. You might be thinking that the $150 signup bonus after the 10k deposit evens out the lack of an interest rate. Well, it does, for a little while. At the end of the day, your savings account balance will not increase more than $10,151.00 for years to come. You’re much better offer looking into a genuine NO FEE account with a .80% APY for continual return on your money. I didn’t even bother looking into the terms any further, but I have a sneaking suspicion there were hidden fees associated with it.

What really irked me about this letter was that they didn’t make the interest rate apparent. Clearly, it must be aweful to go to such an extent to conceal it. Be honest and open with your marketing practices, Banks, seriously. I want to know what I’m going to be earning on my money aside from the signup bonus!!

The moral of this story is, read the fine print of any offer you signup for. Whether it be a deposit account, a credit card, an investment. Know that there may be hidden account fees, hidden interest rates, most of the time – there’s a catch. But, on a more positive note, there are catch-free savings accounts out there. We’ll go into a few of these in an upcoming post :).

2 Comments

  1. IRA vs 401k

    March 23, 2013 at 12:08 am

    I’m surprised Chase wanted so much money to get started. I opened an account with them 2 months ago with nothing and got $125 right off the bat. All I had to do was signup for direct deposit. I can cancel in 6 months if I want.

  2. Credit Companion

    March 24, 2013 at 2:40 am

    I was surprised myself. Chase traditionally is generous and less demanding. I’ve had good experiences with them, but there are too many other competitive offers out there to even consider this one. Happy to hear you found something worth while though!

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