Can you negotiate a higher savings rate with your bank?


News Flash: You probably don’t make a lot from your savings these days. Bank rates across the country are low almost everywhere. the average national savings rate is now only 0.04%.

The pandemic is partly responsible. It’s been about a year since the Federal Reserve cut interest rates to zero to help the economy; at the same time, the private savings rate has skyrocketed. away January 2021, Americans had about $ 3.93 trillion stowed away – a significant increase from $ 1.33 trillion a year January 2020.

“A lot of people have seen stimulus checks and are lucky enough to stay on. Combine that with the fact that you have no opportunities to spend money when the downtime occurs, ”says Ken Tumin, founder of DepositAccounts.com. “Banks are more or less overflowing with deposits.”

This is important because banks make money by borrowing and lending consumer deposits. If you have a lot of deposits, as you currently do, you don’t have to struggle to attract customers by promoting high prices. Online too high yield savings accounts are no longer so productive.

“If you’re looking to save with APY, this is one of the toughest times in our history,” adds Tumin.

So what can you do about it? Do you have bargaining power? Can you get your bank to do theirs Savings rate with the threat of leaving? Here’s what you should know.

So ask your bank for a better savings rate

You may think the customer is always right, but Tumin says it’s hard to predict whether you can get a higher savings rate by calling your bank and threatening to move your business elsewhere.

It varies depending on the chain. It also depends on who you’re talking to – while a store manager or supervisor may have wiggle room on pricing, a frontline customer service representative probably doesn’t.

To increase your chances of success, you should be prepared with evidence. If a competitor offers a higher price for a similar product, you might be able to get your bank to adjust it. However, Tumin recommends making sure that the institutions are actually in the same league. Your local, brick and mortar community bank is unlikely to take care of an online startup bank.

You should also check that the plan you specified is not a time-limited promotional plan.

“You have to look at their current standard tariffs,” he says. “Make sure you’re comparing apples to apples, not apples to oranges.”

Even so, you shouldn’t expect any major improvements. Tumin says that typically about a quarter of a percentage point is the most leeway a bank can give.

Why your bank might be willing to negotiate

One area where you can potentially make progress is in fees.

A DepositAccounts study found that banks generated about $ 34.6 billion in fees in 2016. Another survey found that the average fee for a simple checking account is $ 9.60.

“When someone opens one Verification Account or savings Account or credit card, they have really long terms [agreement] that nobody reads, ”says Paul Kesserwani, CEO of the fintech company Cushion. “Often consumers do not know exactly what they are registering for.”

Kesserwani encourages you to come forward if you are not satisfied with your bank’s fees. He says there are about 15,000 financial institutions in the United States competing for the same clientele, and expansion can be costly. Because of this, they are likely to take your request for an account waiver or overdraft fee very seriously.

“They’d rather give the consumer back some money than risk losing it and having to pay a lot more money to buy a new one,” he adds.

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How to save money on bank charges – without the confrontation

Some people are intimidated by the very idea of ​​a negotiation. That’s where pillow come in. You pay Cushion about $ 36, and its high-tech bots email, chat, and mail on your behalf to reduce credit card and bank account penalties. Remember: ATM fees, late fees, wire transfer fees, etc. Then you keep the refund.

Paying fees to get rid of fees may seem counter-intuitive, but the value of using a service like Cushion is that it’s convenient and decrypts bank statements. It’s similar to that Bill cutting companies Money has previously covered. Kesserwani said Cushion received $ 1.2 million in refunds for its conflict-avoiding customers in February alone.

“People end up getting a lot of money back – money they thought they’d never see again,” he adds.

The final result? If you speak to the right person and come up with convincing evidence, it is possible that your bank will give you a slightly higher savings rate. But it probably won’t be a huge increase. Getting fees waived is likely to be easier.

After all, even if you hire a service to do it for you, you are probably implying that you are so dissatisfied that you will be taking your money elsewhere.

“You often want to keep banks as customers,” says Tumin. “If you’re in a relationship and you are a long-term customer, they will be more likely to forego a fee every now and then or give you a higher rate of interest on your deposit account.”

More from money:

Interest rates on high-yield savings accounts are unlikely to recover “for the foreseeable future”

What is a “good” interest rate and where can I get one?

I was skeptical of online banks – until experts showed me their savings potential



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