This question is regarding the latest article about the best high-yield online savings accounts.
I just read the “fine print” in AE’s FAQs about opening a high yield savings account. It states:
" *The Annual Percentage Yield (APY) as advertised is accurate as of 06/24/2023. Interest rate and APY are subject to change at any time without notice before and after a High Yield Savings Account is opened."
How do I know the APY isn’t going to tank once they have my money? Thanks!
You don’t. That’s the point of the fine print. But every other savings account has the same terms. You can move your money later if you’re unhappy with the interest being paid. That’s about all you can do. If you want a guarantee that the rate won’t change, get a CD instead.
What is the APY rate? Is it better than you can get at Treasury Direct buying 4 week treasury bills?
Resource Center | U.S. Department of the Treasury
Current 4 week t-bill rate is about 5.17% . And you have no state income tax on t-bill yields either.
Thanks for your knowledgeable reply. The follow up question then is: If every other savings account has the same terms, is it common for online savings banks to take advantage of their customers? Or do they tend to continue offering reasonable interest rates relative to economic conditions, inflation, etc.
And does anyone out there have any personal experience with American Express’ high-yield savings account?
I’ve had the AMEX account for a couple of years. With interest goin up over this time, it’s been adjusted up about every 2-3 months. I assume when rates start going down, they will be adjusted down the same way.
I’d say no, not really. A few banks kind of jockey for the top spots, but the ones that are in that group tend to stay there. The ones that are a little lower on the totem pole tend to stay a little lower than the top group. But the groups tend to follow the same rate patterns. There’s not a lot of jumping from the group of top rates way down or vice versa, except for the occasional promo rates, which are advertised as such.