Why I buy a new savings account twice a year

There is a simple reason why I chose this timeline.

Twice a year I go through a routine ritual. I sit at my computer and check the interest rates on high yield savings accounts. Then, if I find a bank that offers a better interest rate than my current bank, I take the time to transfer my money.

There are two big reasons I made this a semi-annual routine in my money management process.

Here’s why I buy a new savings account twice a year

The first and most important reason I look for a new savings account twice a year is that I want to maximize my ROI potential. I have a lot of money in savings. For example, I have a big emergency fund so i’m ready for a rainy day. And I also have separate, dedicated savings accounts for things like home repairs, a new car, or saving for big purchases.

I maintain a lot of savings accounts with big balances because I don’t like to go into debt and want to make sure I’m ready for whatever life throws at me. I may need to draw on my emergency savings at any time. And I might need to switch to my other accounts in the next couple of years. As such, I don’t want to risk this money on the stock market. I need a more secure investment that I can access when I need it, without worrying about withdrawing my money during a bad time. But I still want to maximize the interest I earn.

High yield savings accounts allow me to earn a better rate than I could if I just kept the money in my bank’s savings account. But new savings products are always coming onto the market, and interest rates may change periodically on existing accounts. I compare interest rates to make sure the company I’m saving with still deserves my business. If I find a different offer that earns me more interest, I will move my money.

Of course, it can be a bit complicated. And that brings me to why I do this process twice a year. I have found a semi-annual review to be a good balance between time spent on the process and my efforts to maximize returns. Checking rates and transferring money every month would just become more complicated than it was worth. And that would waste enough time that the gradual increase in rates would not be worth it.

Earn up to $ 50 per year

Doing it twice a year means it only costs me about 20 minutes each year. I have always been able to increase the amount of interest I earn from around $ 40 to $ 50 per year. It comes down to about $ 150 an hour, which is time well spent.

Of course, the additional amount you can earn by change savings account depends on how much you’ve invested as well as how much time you’re willing to spend researching rates. But you’ll probably find that it’s worth taking a look every now and then to see if you could get a better deal. In fact, you might be surprised at how much a change once or twice a year could make a big difference in the interest you ultimately earn.