I was waffling between SoFi (2.5%) and LendingClub (3.12) for my HYSA, but then I found a bunch of smaller places like DollarSavingsDirect, Salem Five Direct, FitnessBank, and Upgrade that are at 3.5%.

I'll have enough money in this account that the percentage difference would be several hundred dollars. Is the difference between these financial institutions worth the difference in interest? I'm worried I'll go with an inferior bank and then the rates will fall and I'll lose any advantage.

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abcbass t1_iugbq0t wrote on October 31, 2022 at 2:35 AM

I'm always a little wary of keeping a lot of money at financial institutions I don't know. I guess they are all FDIC insured (or NCUA) but for me it is just a preference to know and trust the place. I also like a good website UI and for my money to be easily accessible. I use Ally which has a decent rate, but not the highest.

I don't worry too much about the rate because I really try not to keep too much in savings. You seem to be puting hundreds of thousands in savings. Are you sure you need that much liquid cash on hand? If you want it to be safe, but don't need it to be perfectly liquid, you could consider US treasuries. Even a 1 year treasury is like 4.65% right now. And you don't pay state tax.

But if you really want it in the bank it is up to you as to whether or not you want to bother with changing over. It is probably safe and if they drop the rate you can move somewhere else. It just depends on if the money is worth the bother to you.

CambaFlojo OP t1_iugdhl7 wrote on October 31, 2022 at 2:50 AM

Honestly maybe a 1 year bond is the way to go. These are funds slated for an investment property, but I doubt we'll be pulling the trigger this year

Default87 t1_iugcdnv wrote on October 31, 2022 at 2:41 AM

with how frequently banks are changing rates lately (my HYSA has updated its rates probably 6 or 7 times this year, I lost count), chasing rates becomes even less fruitful, as now you arent comparing 12 months of interest at one vs 12 months of interest at another, you are comparing 6-8 weeks of interest at one vs 6-8 weeks of interest at another.

CambaFlojo OP t1_iugdngk wrote on October 31, 2022 at 2:51 AM

Right, that's kind of what I was thinking

Rave-Unicorn-Votive t1_iugb534 wrote on October 31, 2022 at 2:31 AM

Read the threads at Doctor of Credit. I suggest picking a hub bank that houses your primary checking and savings and, if you want to rate chase, open and close those other accounts as you choose.

source: Rate chaser from the mid-aughts.

SteveTack t1_iui4op0 wrote on October 31, 2022 at 2:44 PM

In my experience, DollarSavingsDirect will offer a high rate temporarily and then do a rug pull on you. Might not be worth it.

I use SoFi, but to get that rate you have to do direct deposit with them.

A brokered CD or T-bill might be more fruitful.

OcelotWolf t1_iuj0bq7 wrote on October 31, 2022 at 6:16 PM

FYI I got an email from SoFi letting me know that they're upping my savings APY to 3.0% (but requires DD from payroll). I'm assuming this is for everyone, but the email wasn't 100% clear