Is Your Bank Costing You Hundreds of Dollars? Here's How to Get That Money in 2024

What if the CEO of your big bank stepped out of a corporate jet, walked up to you on the street wearing expensive shoes and an immaculately tailored suit, and demanded that you write him a check for hundreds of dollars? Does that sound fair to you? Would it feel good to hand over hundreds of dollars to your bank for nothing? No one would put up with such shabby treatment from their bank, right?

But in a way, that's exactly what many bank customers are doing by not having a high-yield savings account. If you're keeping your cash in a bank account that pays near-zero APY, you're missing out on free money -- while your bank profits off of you. By opening a high-yield savings account or putting money into one of the best certificates of deposit (CDs), you could earn hundreds of dollars per year in interest.

Let's see how you can stop writing imaginary checks to bank CEOs, get a fairer deal from the banking system, and start growing your savings in 2024.

Why higher APYs are like free money

OK fine; this analogy isn't totally accurate -- if you don't have a high-yield savings account, your bank isn't exactly taking money out of your pocket. But they're causing you to miss out on earnings. Instead of losing hundreds of dollars all at once by being forced to write a big check to your bank's CEO, you're slowly missing out on hundreds of dollars of interest income over the course of a year (or more).

Not all banks pay the same APY (annual percentage yield) on savings accounts. That's because banks compete for deposits. Some of the best-known big national banks already have billions and billions of dollars of customer deposits, and they don't have to try too hard to attract more; that's why the big banks often pay the lowest APYs on savings accounts.

This competition for deposits is also why you can often find the best high-yield savings accounts at online banks, smaller banks, fintechs, and credit unions. Smaller, scrappier banks sometimes have to try a little harder to get customer deposits, and so they're willing to sweeten the deal by offering higher APYs. But just because a bank is smaller or online-only, with no brick-and-mortar branches, doesn't mean it's a riskier place to put your savings. As long as a bank has FDIC insurance, your deposits are protected in case of bank failure, up to $250,000 per account "ownership category."

If your bank savings account is still paying you 0.01% APY, or even the national average of 0.47% APY (as of Jan. 16, 2024), it might be time to get a better yield on your savings. Let's see how much money you can earn by opening a high-yield savings account in 2024.

High-yield savings accounts: How much your savings can grow

Low-interest bank accounts could be costing you hundreds of dollars per year in lost income. Let's see how much a few different amounts of savings would earn after one year in a high-yield savings account or two years in one of the best 2-year CDs, compared to one year in a national average savings account.

The more money you have in savings, the more money you're missing out on by not putting that cash into a higher-yielding account. If you put your money into one of the best 2-year CDs today, you could lock in a high APY and let your money grow with compound interest for the next two years.

It's true that not everyone in America has thousands of dollars in savings. In fact, The Ascent's research found that as of July 2023, the typical American's savings account balance was only $1,200. But even if you don't have lots of cash in your savings account, you still deserve to get the best APY possible. You might even discover that earning a higher yield on your savings can motivate you to save more!

Bottom line: Don't miss out on free money. Don't let big banks profit off of you when you could be improving your own personal finances. Stop letting your money languish in a near-zero APY bank account. Shifting to a higher-yielding account is an easy way to maximize your cash and help your savings grow. Open a high-yield savings account, or lock in a great APY with the best CD rates in 2024.