High Yield Savings Accounts Are Even More Disappointing

I don’t count 0.65 percent APY as “high yield.”

I got an email from TIAA last Friday, inviting me to sign up for a high yield savings account and “earn 8x the national average on your savings.”

Which, yeah, I’ll read that email.

Turns out that “8x the national average” is 0.65 percent APY, which means the national average is 0.08 percent APY. (I didn’t do that math; it came with the email.)

If that’s correct, it means the average American is earning 0.08 percent APY on their savings account—or eighty cents, per year, for every $1,000 saved.

My savings account is with Capital One 360, which is currently offering 0.75 percent APY. That’s over nine times the national average, but it’s also two-thirds of the 1.10 percent APY I was earning from Capital One 360, then ING, in 2010. (Yes, I confirmed that figure. It was in an email I sent the person I was dating at the time, in which I raved about the ING savings account. My love of personal finance goes way back.)

As the NYT reports, savings account interest rates are likely to stay low for a while:

Increases in Interest Rates on Savings Accounts Remain Slow to Materialize

While the Federal Reserve decided in December to increase short-term interest rates, that hasn’t yet translated into significant increases in deposit rates paid out by banks on safe, federally insured deposits — the kind of accounts consumers might want to use for an emergency fund or for parking cash they expect to use in the next month or two.

“Be patient,” advised Greg McBride, chief financial analyst at Bankrate.com. “It’s going to take a couple more rate hikes before we see broad-based increases.”

The NYT suggests investing in CD ladders, which… okay, I just looked at Capital One 360’s CD options, and I’d have to get an 18-month CD before I’d get the interest rates I was earning on my savings account in 2010.

I’d rather not, honestly. I need to keep my emergency fund liquid, just in case the world decides to say “fuck you.”

My Fuck Off Fund Is More Like a Fuck You Fund

Of course, in terms of savings interest rates, maybe it already kinda has.

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