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forum thread Posted by rfischer314 • Sep 13, 2023
forum thread Posted by rfischer314 • Sep 13, 2023

5.25% High Yield Savings Accounts - No Minimums or Fees

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Best solution I've found and - unlike the tricks current banks are pulling* - the interest rate rises over time with treasury rates.

https://www.newtekbank.com/person...d-savings/

*CapitalOneBank created a *new* Savings account with some silly name and your current savings account stayed at basically 0% and you had to open a new account (it was quick) and send the funds over. So now I have an empty, worthless old savings account I've had for >15 years and had to go update routing numbers on various sites. That got me looking around.

Newtek has been around decades, was a BDC co that converted to a bank at beginning of the year. As a result it doesn't have a huge portfolio of underwater treasuries and can profitably pay depositors market rates.
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Best solution I've found and - unlike the tricks current banks are pulling* - the interest rate rises over time with treasury rates.

https://www.newtekbank.com/person...d-savings/

*CapitalOneBank created a *new* Savings account with some silly name and your current savings account stayed at basically 0% and you had to open a new account (it was quick) and send the funds over. So now I have an empty, worthless old savings account I've had for >15 years and had to go update routing numbers on various sites. That got me looking around.

Newtek has been around decades, was a BDC co that converted to a bank at beginning of the year. As a result it doesn't have a huge portfolio of underwater treasuries and can profitably pay depositors market rates.

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Sep 13, 2023
12,256 Posts
Joined Dec 2008
Sep 13, 2023
tennis8363
Sep 13, 2023
12,256 Posts

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Fun until they drop the interest rate.
1
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Sep 13, 2023
3,527 Posts
Joined Dec 2007
Sep 13, 2023
iahawks550
Sep 13, 2023
3,527 Posts
Quote from tennis8363 :
Fun until they drop the interest rate.
Most people utilize these as a way to earn a little interest and maintain instant liquidity. It's not a long term investment vessel.
4
Sep 13, 2023
124 Posts
Joined Nov 2003
Sep 13, 2023
lerryjee
Sep 13, 2023
124 Posts
Want to point out also that internet banks have very slow transfer times. Three business days is common. If you needed access like right away, good luck!


Quote from iahawks550 :
Most people utilize these as a way to earn a little interest and maintain instant liquidity. It's not a long term investment vessel.
1
4
Sep 14, 2023
179 Posts
Joined Apr 2018
Sep 14, 2023
Lintegras
Sep 14, 2023
179 Posts
Quote from rfischer314 :
[...]
*CapitalOneBank created a *new* Savings account with some silly name and your current savings account stayed at basically 0% and you had to open a new account (it was quick) and send the funds over. So now I have an empty, worthless old savings account I've had for >15 years and had to go update routing numbers on various sites. That got me looking around.
[...]
CapitalOne did what? I'm looking at their page of Savings account offerings, and only see a single Savings account, along with CDs, and an account for kids.
2
Sep 14, 2023
1,153 Posts
Joined May 2013
Sep 14, 2023
S_Klass
Sep 14, 2023
1,153 Posts
Quote from iahawks550 :
Most people utilize these as a way to earn a little interest and maintain instant liquidity. It's not a long term investment vessel.
True, it's not a timed CD. It's just high interest savings account.
1
Sep 14, 2023
648 Posts
Joined Jun 2017
Sep 14, 2023
PickyCustomer
Sep 14, 2023
648 Posts
Quote from tennis8363 :
Fun until they drop the interest rate.
I doubt it drops. It is possibly going higher. Inflation is here to stay for a long time. So buying investment items such as house is still a better strategy. I also do not think there will be a crash. This is because of the special economy condition we are in and also what is happening in the rest of the world which is helping out economy. At the mx of the day this is a good solution for short term. I am not familiar with the is bank but strongly suggest to go with a good one even if there is like 1 percent difference. I had very bad experience with some of the banks.
Last edited by PickyCustomer September 14, 2023 at 03:46 AM.
5
Sep 14, 2023
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Sep 14, 2023
adrenaline
Sep 14, 2023
1,219 Posts
Competitive rate for now. I am using a money market fund within my brokerage account that is currently earning 5.19% and should be exempt from state income tax. The real advantage is that my fund will track with interest rate changes instead of the whim of a bank.
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Sep 14, 2023
437 Posts
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Sep 14, 2023
xtencornfield
Sep 14, 2023
437 Posts
I've been looking to move a pocket of funds from Ally to take advantage of the slightly higher interest rates. Note these comments are based solely on some research I've done over the past several days, you should do your own legwork too.
  • I did see in comments for Newtek—that I didn't with several others online banks that I looked at— is that they raise rates for existing customers and, to the best of my research, don't seem to create new products so they can separate the existing customers from new customers and not give existing customers the highest rate.
  • As best as I can tell, Newtek is not available through Mint, which I use, and that may be the case for other budgeting/finance tracking programs.
  • Ally tends to be speedier than 3 business days for transfers, although it's still up to 3 days stated I believe, so that could be a deal breaker for me, maybe not for someone else.
  • No mobile check deposit according to review sites but I have not confirmed, confirmed this.
1
Sep 14, 2023
2,409 Posts
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Sep 14, 2023
litobirdy
Sep 14, 2023
2,409 Posts
Quote from lerryjee :
Want to point out also that internet banks have very slow transfer times. Three business days is common. If you needed access like right away, good luck!
this is why I like to open savings accounts that have the debit card option with it.
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Sep 14, 2023
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Sep 14, 2023
thegman230
Sep 14, 2023
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This bank will only allow withdrawals to the same bank account that initially funded it. That's ridiculous. If I want to pull out interest earned to another bank you can't.
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Sep 14, 2023
23 Posts
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Sep 14, 2023
jle036
Sep 14, 2023
23 Posts
Quote from Lintegras :
CapitalOne did what? I'm looking at their page of Savings account offerings, and only see a single Savings account, along with CDs, and an account for kids.
This happened to me. I've been with Capital One since they bought ING. I looked at my savings account and they were earning 0.4%ish and new accounts at 4.3%. I had to close numerous accounts I had setup for different savings objectives (vacation, emergency fund, etc.) And setup new accounts and new reoccurring transfers. It was a huge PIA. My perception was Capital One wanted to keep users who didn't monitor their accounts closely at a poor interest rate.
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Sep 14, 2023
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Sep 14, 2023
02nz
Sep 14, 2023
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I don't bother anymore with chasing interest rates on "high-yield savings accounts" unless there's a bonus. Instead, I buy SGOV (an ETF holding very short-term treasuries). It offers similar yield - about 5.2% - and unlike savings accounts almost all dividends are exempt from state income tax. Buying/selling is free at most brokerages these days.
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Sep 14, 2023
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Sep 14, 2023
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Sep 14, 2023
rcdwvd
Sep 14, 2023
94 Posts
Thanks
Last edited by rcdwvd September 14, 2023 at 03:41 PM.
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Sep 15, 2023
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Sep 15, 2023
Fant
Sep 15, 2023
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Quote from 02nz :
I don't bother anymore with chasing interest rates on "high-yield savings accounts" unless there's a bonus. Instead, I buy SGOV (an ETF holding very short-term treasuries). It offers similar yield - about 5.2% - and unlike savings accounts almost all dividends are exempt from state income tax. Buying/selling is free at most brokerages these days.
1 year return on SGOV i'm seeing about 3.8% which is below most recent treasury bills / cds unless i'm looking at it wrong ?
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