Interest rates on savings accounts
I’ve encountered an issue with interest rates on savings accounts. Years ago I set up “kids accounts” with ING that later became Capital One savings accounts for my grandchildren. Those accounts have .30% interest as did my original primary account. Although the Fed increased interest rates, none of those accounts received the increased interest rates. I had to set up a new savings account for my primary account and then move my money into it but I’m irritated that I’ll have to set up and move $$ for my grandchildren’s accounts too. I am wondering why it’s up to the consumer to start new accounts to get better rates and if this is widespread banking policy. Shouldn’t the banks apply the increase across savings accounts no matter their age? Moreover, shouldn’t the banks notify their customers that no matter what the Fed is doing, their old savings accounts won’t get the higher interest rates?
Terry Says
The banks are counting on the fact that people just let savings sit there at low rates! Yes, it’s up to you to demand higher rates. Ask them — and if they won’t match current rates, you’ll have to go through the process of setting up new accounts.
One thought — You mention savings accounts for grandchildren. I dont’ know how old they are, but money in a custodial account (even with the grandparent as custodian) will weigh very heavily against them if they apply for financial aid for college. Maybe this is the time to open a 529 College Savings Plan for each of them. Search my columns for an explanation. If you live in Illinois (as many of my readers/listeners do) then go straight to www.BrightStart.com.
