Money doesn’t grow on trees. And it doesn’t grow in savings accounts at big brick-and-mortar banks like Chase, Wells Fargo, and Bank of America either. Today the average interest rate across all US-based savings accounts is a paltry 0.09%. Yet, a few clicks away you can find rates that are 20 times higher and requiring no additional risk. How is this even possible?
Meet the high-yield savings account
If a bank has tellers and physical locations, it’s got a ton of overhead expenses. (JPMorgan Chase alone has a quarter-million employees.) These costs then get passed along to you, the consumer (i.e. saver), in the form of lower interest rates.