Crazy interest rates
My mom's been telling me about the interest she's been earning on a money market account she recently opened. I give you Exhibit 1:
Prior to that, I had opened the same kind of account with a higher value (on behalf of someone who's accounts I manage) and that account is only earning an average of $10/month. What the heck?! How in the world can she be earning that much interest?! What am I missing?
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Hi MacGsMom !
Is the Money Market account a mutual fund? It sounds like your mom's account may be invested differently than the other account you mentioned. Are you able to see any details or account breakdowns to compare?
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Faness they're both titled "relationship money market" accounts but yes, I'm wondering if it's an MM IRA or something. you can bet I'm stopping by to ask. that still seems really high though. I would hate for it to be a bank error though, and wipe out my mom's windfall! 🤣 she's so pleased with herself!
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MacGsMom Maybe only show them the other account to start with, just in case. 😉 I'd love to hear what you find out, though!
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That is about a 2.5% APY which is spot on for a large money market right now. If you also deposited $60000, you should be seeing similar interest payments. If you have less than $60000, your interest payments at the same rate will be less, because there is less principal.
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WordTenor nope, I'm seeing $10/month interest on an account twice that size. :(
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MacGsMom Then move your money somewhere with a better interest rate. $10 on twice the balance is like 0.01%. I get 20x that on my checking account.
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nolesrule Yeah, I'll be making a visit to the bank today. Hopefully it's just an oversight, albeit a costly one. I really like my bank so hopefully we can work things out.
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MacGsMom The local banks usually don't have very good interest rates. I'm currently getting 2.4% in my Betterment savings account and 0.4% in my Schwab checking account. Both are online accounts.
I am curious about the details of your mom's account though.
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Superbone I can't do much with this account right not (it's one I manage for someone and opening new accounts is a hassle), but I opened one at Betterment for myself today. Thanks for the tip.
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MacGsMom said:
What am I missing?All of the details. Where was the account opened? What’s the account called? What’s the interest rate? It is all very explainable.
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Mystery solved. It was a bank error that resulted in the wrong interest rate being applied. They are going to backdate the interest to when I opened the account in April. Thanks to YNAB though, I'm in the habit of actually examining accounts or I wouldn't have noticed. That said, I'll likely be moving at least a portion of this to an online option.
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MacGsMom Interesting......
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