If You Have One of These 5 Popular Savings Accounts, You Could Be Losing $400 This Year

Thanks to the Federal Reserve's relentless drive to quash inflation, rates on savings accounts and certificates of deposit (CDs) are at their highest in over two decades. Though rate cuts may happen soon, it's not rare to earn 5.00% APY on your savings today. If you had $8,000 -- the median savings balance in 2022 -- in an account with a 5.00% APY, you would earn about $400 in interest in a single year.

That said, big national banks have been much slower to offer generous rates. Several, in fact, have almost completely neglected to raise their rates on flagship savings accounts. Many are still partying like it's 2021, offering a mere 0.01% APY on your savings. If you had $8,000 saved in an account with a 0.01% APY, you would earn $0.80 in a single year, thereby costing you around $400 in opportunity costs.

That might be the price you pay to get other big-bank benefits, like branch access and a dense ATM network. But for those looking to maximize their interest earnings, the following five popular savings accounts could be losing you money.

1. Bank of America Advantage Savings

The Bank of America Advantage Savings pays a 0.01% APY for balances less than $2,500 and a 0.01% APY for balances over $2,500.

Our Picks for the Best High-Yield Savings Accounts of 2024

American Express® High Yield Savings APY 4.25% Rate info 4.25% annual percentage yield as of July 22, 2024 Min. to earn $1 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	APY 4.25% Rate info 4.25% annual percentage yield as of July 22, 2024	Min. to earn $1
NexBank High-Yield Savings Account from Raisin APY 5.26% Min. to earn $1 Open Account for NexBank High-Yield Savings Account from Raisin On Raisin's Secure Website. Member FDIC.	APY 5.26%	Min. to earn $1
Western Alliance Bank High-Yield Savings Premier APY 5.31% Rate info 5.31% annual percentage yield (APY) is accurate as of 7/11/2024 and subject to change at the Bank’s discretion. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY. Min. to earn $500 to open, $0.01 for max APY Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website. Member FDIC.	APY 5.31% Rate info 5.31% annual percentage yield (APY) is accurate as of 7/11/2024 and subject to change at the Bank’s discretion. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.	Min. to earn $500 to open, $0.01 for max APY

You can, however, get a higher APY by moving up the Preferred Rewards tiers. A Gold Tier APY pays 0.02% on all balances, Platinum Tier pays 0.03%, and Platinum Honors or higher pays 0.04%. Considering that you need a three-month combined average balance of $20,000 to get to Gold, this isn't a feat all can accomplish.

2. Chase Savings℠

The Chase Savings℠ account is also part of the 0.01% club. In fact, The closest thing Chase has to a high-yield savings account is its Premier Savings.

When this account is linked to a Chase Premier Plus Checking℠ or Chase Sapphire Checking account, its APY becomes a steady 0.02% on all balances. Without that relationship perk, however, the account reverts to Chase's standard savings rate of 0.01%.

3. Wells Fargo Way2Save Savings

The Wells Fargo Way2Save Savings has a 0.01% APY. If you wanted to earn slightly more interest, you could go with the Wells Fargo Platinum Savings, which has a 0.05% to 2.51% APY, depending on balance and relationship rate eligibility.

4. U.S. Bank Standard Savings Account

As you might have guessed, the U.S. Bank Standard Savings Account also earns an APY of 0.01% (as of 3/24/2023).

Like Bank of America, U.S. Bank has a four-tiered rewards program that gives you benefits based on your combined balances. Unfortunately, no matter what tier you fall in, the U.S. Bank Standard Savings Account will still pay a rock-bottom APY for all tiers.

5. Truist One Savings

Another savings account that earns 0.01%, the Truist One Savings pays this rate across all balances. In case there was any ambiguity, Truist's rate schedule tells us the 0.01% APY applies to balances up to $99.99 billion.

Although it may pay a higher APY for balances above that, you'd have to participate in the $100 billion club to find out.

If you want to earn more interest, get this high-yield savings account

Western Alliance Bank High-Yield Savings Premier earns an industry-leading 5.31% APY on your savings. All you need is $500 to open this account, after which the minimum to earn maximum APY is only $0.01. That's right -- with a single Abe Lincoln coin, you can unlock this towering APY.

At an APY of 5.31% and a median savings balance of $8,000, you would earn about $428 in interest within a year. That's $427.20 more than what the five accounts above could earn at the same time. Much like watching a bunch of three-toed sloths race a cheetah, the Western Alliance Bank High-Yield Savings Premier is miles ahead in yearly earnings.

Of course, you won't get the same banking benefits as large national banks. But if you're not totally sold on relationship benefits and cash deposits, why would you need a big bank anyway? You can transfer money out of this high-yield savings account to a linked checking account. From there, you can withdraw it from an ATM or branch.

You should weigh the pros and cons carefully. But if one of the aforementioned savings accounts isn't doing much for you, don't hesitate to get a high-yield savings account for the greater earning potential it offers.