aaronsegman t1_j2f6aif wrote on December 31, 2022 at 8:36 PM

Got enough saved up that I'm starting to pay attention when I see an ad for an online savings account paying 4%. I was thinking of opening several of them at different places so I'm not putting all my eggs in one basket. In case I forget to read SketchBank's fine print that says I can only withdraw funds on a Tuesday by flying in person to their call center in India.

I guess my first question is, is this a good idea? Is there something I'm missing? If a savings account pays more than a CD, what's the catch?

My second question is, if you open multiple savings accounts at once, do you get on some list? I worked at a bank many years ago and I remember they flagged people for all kinds of stupid reasons based on computer models and third party reporting bureaus I wouldn't trust to hold my sandwich.

HowDoesIAdult t1_j2f9e0j wrote on December 31, 2022 at 8:59 PM

>I guess my first question is, is this a good idea?

Idk if you need "several of them" at different banks, 2 accounts at different banks is typically more than enough.

>If a savings account pays more than a CD, what's the catch?

It depends on why the HYSA pays so much and the CD pays less. In general with HYSA accounts you just want to make sure you know if there is a limit to how much money earns the high interest rate, if you need to qualify for the high interest rate somehow, and if they have any withdrawal limits you need to be aware of.

Bank A might have an HYSA that pays 3.5% APY but only on the first $5000 deposited, and it only pays the 3.5% if you do 10 debit card transactions per month. But bank B might have an HYSA that pays 3.4% without any limits or requirements, you just deposit the money and earn interest

>My second question is, if you open multiple savings accounts at once, do you get on some list

Generally banks care more about checking accounts because they are higher risk. Opening a savings account should be fine in most cases. There will be a record of you owning the account but that is likely it.

The unfortunate truth is if you want to exist in society today then you WILL have your info tracked somewhere. Renting a house? There are companies that track that. Paying a mortgage? They track that too. Opened a bank account? Tracked. But people ignore it 99.9% of the time and everything works out fine.

713ryan713 t1_j2fgwe1 wrote on December 31, 2022 at 9:54 PM

Savings accounta can change their rates. Very common for them to have a great rate during a period of expansion and then it starts to go down relative to peers. CD rates are secure for the length of the CD.

WynonaRide-Her t1_j2ff81j wrote on December 31, 2022 at 9:41 PM

Investment Firms are going to be your best friend. Brokerage Account = savings account with access to the market. You can choose your own investments (self directed) and pay little to zero expenses for the account. A one year CD currently at 4.25%. Any equity’s aka stocks- you should have a long term hold on. Great time to buy in a down market. Do yourself a favor don’t EVER try and time the market and park your cash at a bank…that is LAME AF. Cheers!