The FED Just Ruined Savings Accounts

What's up, guys? It's Graham here.

So, unfortunately, in the last few weeks, you may have noticed a very significant change to your high interest savings account, and that would be a lack of high interest being paid in your savings account. That's right. In a day I never hoped would come, high interest savings accounts are really no longer high interest anymore because the Fed lowered their benchmark interest rates pretty much down to nothing, leaving banks with no other option other than to slash the interest they pay you for keeping your money with them.

Now, it's not really surprising why the Fed would do something like this and lower interest rates. After all, lower interest rates mean that money is cheaper to borrow. It encourages more lending, and people could go out and finance more growth. In a way, it incentivizes people to go and invest their cash instead because otherwise, if they just keep it sitting in a bank account, they're not earning anything. In a sense, low interest rates just act like catnip for the economy because it causes more money to flow into the markets, but it penalizes anyone who holds cash because they're no longer making as much money anymore.

So, in this video, we're gonna be going over the best high interest rate savings accounts out there that are still paying you a really good amount on your money despite what the Federal Reserve has done to ruin them. Because all of these banks are competing for your business, you can get some really good perks right now. That's exactly what's caused me to switch banks, move my money around, and try to get the highest interest rate possible throughout all of this craziness.

Although keep in mind that these rates are subject to change at any time, and with my luck, as soon as I post this video, I'm gonna jinx it, and banks are gonna lower their interest rates yet again because that's always what seems to happen, and that's my life.

So, in order to counteract the superstitious jinxing, if you wouldn't mind smashing the like button through YouTube's algorithm, it greatly helps up my channel a lot, and I put a lot of work into making videos like this to make them as accurate as possible. None of this video is sponsored, by the way; none of these banks are paying me to mention them in this video, even though I wish they were, but I'm not getting paid to mention them.

Coming in at number 6 on the list, meaning it's good enough to be on the list in the first place, is a classic, and it's an old favorite of mine, and that would be Discover Bank. Now, Discover is one of those companies that with pretty much everything they do, they're just really good. Like, to be completely honest, I don't have anything bad to say about them, and my only complaint is that I have nothing to complain about.

To start, they're really one of the best online banks out there. They don't have any hidden fees, they don't have any maintenance fees, they don't have any minimum balance, and they make that very clear as soon as you go to their website. They also have free ATM access, free debit cards, free checks—the list goes on. But let's talk about the savings account because that's really the focus of this video.

At the time of making this video, they're paying you a one and a half percent interest rate on your money. Again, that's with no fees, no minimums, and no hidden agenda to try to trick you into paying for something you don't need. It's really just as easy as depositing your money and then enjoying some of that sweet, sweet interest. Again, to fully appreciate just how good one and a half percent interest is right now, let me show you what some of the other banks are offering.

Chase Bank pays you 0.05 percent interest on balances over two hundred and fifty thousand dollars. So just right there, Discover pays you 30 times more interest. Bank of America pays you 0.06 percent if you have more than a hundred thousand dollars with them. Wells Fargo just basically slaps you in the face and pays you 0.01 percent on all balances because they're Wells Fargo—and what did you expect from Wells Fargo? Whoops, this is always crooked. There we go.

So, as you could see, even though one and a half percent doesn't sound like a lot of money compared to what else is out there, one and a half percent is a lot of money, especially coming from a company that just has all around really good banking services. They have one of the best beginner credit cards that I recommend pretty much everyone start out with, and they're not evil like a lot of the other banks out there. So, this one definitely gets a big pass from me.

Next, number five on the list is a company that I've talked about and mentioned here non-stop on the channel. I've used them for many years and I've reached out to them multiple times to see if they'll sponsor one of my videos, but they never get back to me. And that's not that strange because they just end up talking about them anyway, so why would they pay me for that?

That's Ally Bank. They're a bank that, in the middle of everything and the Fed reducing interest rates and everyone else racing to the bottom, Ally Bank barely budged, and they remained really competitive because they knew that was their chance to stand out and gain a whole bunch of business. And hey, they were right. Right off the bat, they're offering you one and a half percent interest on your money with, just like Discover Bank, absolutely no minimums, no hidden fees, no catch whatsoever.

It's really just a very solid one-and-a-half percent interest on your money. Ally Bank has really been the only bank I consistently come back to after trying so many of the other banks out there, and even if they don't offer you the highest interest rate out there, they pretty much make up for it with everything else. To start, you could open up an account with them for free online, and once you do, you can open up a checking account, get free debit cards, free checks, and you can get as many as you like.

Now, I'm sure at this point, you might start thinking to yourself, "But Graham, my credit union in Buffalo, Wyoming pays 1.6 tail percent! Why didn't you mention them?" Just like it. And sure, I'll admit there are places that pay more than this. However, I'm focusing on the banks that anyone in the United States can easily use and apply for. To me, Ally Bank is really one of those places that's so much more than just a savings account. It's really the entire package. Not only are they a full-service bank and lender, but they're also an investment platform with $0 stock trades.

I use this myself because it's been extremely easy to invest with the same company I have a lot of my money with, and so far, I've been extremely happy. I also highly recommend the no-penalty 11-month CD, and just like a little life hack that I've used in the past is that as soon as you see the Fed lowering interest rates, just go and lock up some of your money in one of these CDs. I've noticed Ally Bank is always a few days late on lowering their interest rates, so as long as you could get to it within the first 48 hours, you could usually lock in a really good interest rate before they lower it.

This is what I did, and I'm now getting a 1.75 percent interest rate on my money guaranteed for 11 months and $25,000 increments with no penalty for taking it out early. In addition to that, their customer service has also just been top-notch. Now, I will admit because they've been growing in popularity, it does take you now a little bit longer to reach someone on the phone than it did a year ago, but it's really not that big of a deal to wait like two minutes instead of like thirty seconds because everything else they do has been just perfect.

Now, fourth on the list, let's talk about another fan favorite that everyone loves bringing up and mentioning here, and that would be Marcus by Goldman Sachs. That's right, the same company with declining profits and economic doomsday predictions is actually offering you a pretty good interest rate right now in your savings account. Now, this company is fairly similar to the previous two that I just mentioned in the sense that they don't have any minimums, no hidden fees, the usual, but this company ends up paying you a slightly higher interest rate at 1.55 percent.

They're basically just like, "We're gonna see what all these other banks are doing, and then we're gonna beat them by just that much so we end up showing up first before them." It's the same reason why the Apple stock ticker is AAPL, because now they show up before everyone else with the first two letters being AS. Very smart.

However, the downside of this account is that at the end of the day, it's just a high interest savings account without any access to additional banking features like a checking account. For some people this is not going to be an issue if you're only using them for the high interest savings account, but for other people this could be a bit annoying. Another really lame downside of this bank is that they only have a mobile app for iPhones right now, and even within that app, they do not allow for mobile check deposit. So, that just means that in order to get the money into this account, you need to set up an ACH transfer or a wire from another bank and then have to wait a day or two to get your money.

Now, in the big picture, it's not that big of a deal, but still, it's just annoying. That's all it is. So, in my opinion, even though they're a good bank and they pay you slightly higher interest, it's probably not worth the hassle just to get 0.05 percent more in interest, but again, to each their own, and they do end up paying you just a little bit more than the other two I mentioned.

Next, we go on to our final three in terms of which savings accounts are the most profitable, and right now, that award goes to the American Express savings account. That's right, American Express is actually a company that offers a lot more than just a metal credit card with a really high annual fee. They also happen to pay you a pretty good interest rate on your money as well, and to me, that just makes sense because American Express is one of the most prominent credit card companies out there. Since they handle such a high volume of payments, it makes sense for them to get into the banking services as well.

With this, there are no fees, no minimum balances, and the customer service with American Express has always been top-notch. However, just like my last example, just keep in mind that this is not a full-service bank; it's only a savings account. So you're not going to be getting access to a checking account, checks, or anything else like this. But like I mentioned, if you're just looking for a place to stash your cash, and that's it, you just want a good interest rate, then this one hits that category, and I would highly recommend it.

And now we move on to our final best two choices. Coming in at a whopping 1.7 percent interest is CIT Bank. Not to be confused with Citibank; this is CIT Bank. I'm not sure why they have names so close to one another, but it is what it is, I guess. Anyway, this is a bank that's offering you 1.7 percent interest, but there is a bit of a catch. If you want the 1.7 percent interest rate, you have to make it worth their while. After all, they're not just giving out 1.7 percent to anybody.

So, if you want to enter the cool kids' club and get 1.7 percent in their savings account, you've got to come in with a minimum of $25,000 or maintain a $100 monthly minimum deposit. But as long as you can meet one of those requirements, it's a really good bank with full access to all the banking services, including a checking account. Now, CIT Bank does offer alternatives for anyone who does not have $25,000 available to deposit. For example, they have a money market account that pays you 1.75 percent. It's essentially the exact same thing as a savings account, except there is no $25,000 minimum, and it pays you a little bit more money for now.

The interest rate on this account could end up going down, but also so could their savings account, so it might be a good idea to just go and use this account for now and then monitor the rates. Then if one day, the savings account becomes more profitable, just go and move your money over there instead. But overall, I have to say CIT Bank is really good.

But if you're looking for a bank that maybe offers you just slightly more, then we have this bank here. This is a bank that really throughout all of this has not lowered their rates—they just kept them the exact same. Maybe they just forgot about it or something happened, but throughout all of this, they have not budged, and it's a bank that I've been using a lot recently, and that is HSBC Bank, which is paying you 1.7 percent on your money.

No, seriously. I'm actually kind of worried they forgot to change this because they've been paying this 1.7 percent now for months. It's been unchanged! Even though the Fed had dropped rates twice in the last two months, they just haven't done a thing. Maybe it just never been updated, but you're still paying right now 1.7 percent with this.

There's no maintenance fees, there's only a one dollar minimum balance to open an account, and that's it. I have my mortgage with them, I have a checking account with them, I have a savings account with them, and for a full-service bank, they have been amazing. Plus, unlike some of the other banks that I mentioned, HSBC has physical branch locations that you could walk into.

Which, I don't know why you would ever really need to go into a bank anymore when you could just do everything from your phone, but anyway, the option is there if you want to do it. Now, I will say, as happy as I am with them, the only downside that I could see is that their mobile app and website are just extremely confusing to use. Even for me, it takes me a while to figure out just how to log in, go through like a bajillion authentication processes, and then you're finally in your account.

I know they're doing this to try to make the accounts really secure, but it's just confusing and it's frustrating. Not to mention, in the event you do need to reach somebody and you call their customer service number, you're probably gonna be on hold for like ten to twenty minutes, compared with let's say Ally Bank, which usually just rings for like 30 seconds and then someone picks up. But as long as you don't need to call anybody and you're looking for a full service bank with really high interest, this is a place that I really like.

So, there you have it. Those are the best savings accounts currently available right now with the highest payouts, despite the Fed lowering its interest rates down to pretty much nothing. Do remember, though, that these interest rates are subject to change at any time, and that means I probably just jinxed it by talking about it. But assuming I didn't just ruin it right now, feel free to use these banks and collect some of that really sweet, sweet interest.

Obviously, using these banks is not going to be considered an investment, but a high interest rate savings account is important to make money while you go and save up for something else, keep your emergency fund, or just stash some cash away until you go and buy Carnival Cruise stock with it. So don't go and get angry with me that these accounts are paying one-and-a-half percent while you just made twenty percent on Amazon in the last month. That's not how this works, and that should not need explaining.

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Thank you, guys, so much for watching, and until next time!