Don’t lose interest
Your savings account might be earning $1 a year on $10,000 while an FDIC-insured online bank pays $400 on the same money, with the same government insurance. A fintech collapse once froze $112 million in customer deposits, so here’s how to verify a bank is real before you move a dime.
ChatGPT/Kim Komando
I need your help: Add Komando.com as a preferred source on Google
I love answering your questions, and Lauren in Los Angeles (who listens to me Saturdays from noon to 3 p.m. on KEIB AM 1150, hi, Lauren!) asked, “I see online banks that offer really high interest rates. Are they safe? My bank doesn’t even pay 1%!”
Lauren, most people don’t know what their savings account pays, and banks count on that. Big-bank accounts pay as little as 0.01%, and the national average is 0.38%, per the FDIC.
Online high-yield savings accounts (HYSAs) pay 3% to 4%. Same dollars, same insurance, as much as 400 times the interest. Your $10,000 emergency fund earns $1 a year at the marble-lobby bank. Or you could make $400 online. Why? No branches, no tellers, no lollipops.
🏦 Four big names, compared
I wouldn’t go with just any online bank. Stick with established players. All four: FDIC-insured, no monthly fees, no minimums. Rates drift, so check the day you open.
📌 Ally Bank, around 3%: big ATM network, 24/7 support.
📌 Marcus by Goldman Sachs, 3.4%: online only, 24/7 chat.
📌 Capital One 360, around 3%: the rare online bank WITH branches.
📌 American Express, around 3%: online only, 24/7 support.
🔒 ‘But, Kim, is it safe?’
A real online bank has the same FDIC insurance as the big guys: $250,000 per depositor, per bank. The danger is fintech apps that aren’t banks. When middleman Synapse collapsed, app customers lost access to $112 million. One saver got back 75 cents of his $15,000. Savings go in a bank, not an app wearing a bank costume.
✅ Your 10-minute switch
- Find your current rate. It’s in your app or statement under “APY,” in tiny print, naturally. Prepare to be insulted.
- Verify the bank you’re considering is real. Type the name into BankFind at fdic.gov (credit unions: ncua.gov). Some banks use a different legal name (Marcus is “Goldman Sachs Bank USA”), so match the name beside “Member FDIC” on its site. No listing, no deposit.
- Open and link an account. Grab your driver’s license and Social Security number. Link your old checking with its routing and account numbers, then confirm two tiny test deposits that show up in a day or two.
- Move the money. Transfers take one to two business days, so keep enough for a month of bills in checking. Set a recurring monthly transfer. Savings you never see are savings you never spend.
Nervous? Move half. When the first interest payment hits, you’ll move the rest.
My bank called about my outstanding balance. I said, “Thank you, I used to do gymnastics.”
🎯 Send this to someone who thinks a passbook is high tech. Now, use those share icons below to spread this know-how.
📱 Text this to your group chat: Big banks pay 0.01% on savings = $1/year on $10K. FDIC-insured online banks pay ~4% = $400/year. Same insurance. Kim Komando says check fdic.gov’s BankFind, then move it.
