Trying to narrow down which HYSA I want to transfer my emergency fund to

Submitted by bosceltics2009 t3_10oyzig in personalfinance

Hello all, I have been lurking this sub for the past few weeks and feel like I have learned a lot already but still consider myself a novice at personal finance so go easy on me haha.

Anyway, once I decided I should actually start saving some money, I decided to take 20% of my income and put it into savings until I get to 6 months of monthly expenses (probably 12k but shooting for 15k). Right now I have 3k sitting in my BoA savings account which I've come to learn has laughable interest rates.

So when researching some HYSA's I found 2 that have >4% interest rates (UFB Direct and Upgrade Premier savings). They are both FDIC insured, UFB direct claims no maintenance fees, while Upgrade Premier savings claims no account fees.

I'm making this post because there was a post here from a few days ago with someone asking where to transfer their savings to and a lot of people are suggesting Ally or Discover. Now Ally at 3.3% while it is much higher than my current BoA savings is still lower than the ones I mentioned earlier. Is there something I am missing about UFB Direct and Upgrade Premier? Does anyone have experience with these accounts? What else should I be looking for researching HYSA's features? FDIC Insurance, 24/7 online banking, interest rate, no fees....anything else?

Also, I understand that in February there may be a interest rate hike so I will keep my ears open for that as well.

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flobbley t1_j6hzfoa wrote

In general, HYSA rates can change on a dime, so looking at the current highest rates is only marginally useful. You want to look at who consistently has high rates which tend to be places like Ally or Discover. It is not uncommon for other less well known banks to bump up their interest rates temporarily to get new customers, then drop them back down. So in that sense it usually makes more sense to go with a bank with high enough interest rates that you like, rather than the bank with highest raw interest rate.

>Also, I understand that in February there may be a interest rate hike so I will keep my ears open for that as well.

The Federal Reserve is almost certainly going to raise the Federal Funds rate by 0.25 percentage points in February, but this is not the rate you get on savings account. In all likelihood this rate hike is already "priced in" to the rates you're seeing.

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bosceltics2009 OP t1_j6hzqbi wrote

I see, that is some good insight to have. I have been looking into Ally since seeing that prior post I was referring to and it seems like a great option. The only sticking point was the discrepancy between their interest rate vs higher rates on the market. But that absolutely makes sense to consider who offers high rates consistently.

Thank you so much!

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azteg28 t1_j6hzpfl wrote

Any of the big names will do, and I recently did Discover as they have a promo for $150 for a 15k deposit or $200 for a 25k deposit which makes up for the .2% I'm missing out on at only 3.3%

I haven't looked at those smaller names too hard but just make sure you read all the fine print as most require steps such as minimum deposits a month and stuff of that nature.

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bosceltics2009 OP t1_j6hzvtr wrote

Guess I didn't even think of the prospect of minimum deposits PER MONTH. This is why I'm glad I asked on this reddit, I can see I still have a lot to learn.

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Youngfinance3 t1_j6i5ve5 wrote

My SOFI is at 3.75 and I’ve had no issues with them

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shadow_chance t1_j6jcgx5 wrote

It doesn't really matter. They're all very similar.

Even on 15K, the difference between 4% and 3.3% is about $9/month in interest.

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