Considering how “high-yield” savings accounts used to give returns of 4-5%, reader Phil thinks it’s a bit disingenuous for banks to continue marketing them as such when the rates are only 1%. He sent in a picture of a recent piece of junk mail he got from American Express to illustrate.
Indeed, there once was a time in days of yore when a “high-yield” savings account really meant something. As opposed to the .3% or some nonsense returns you could get from a standard brick and mortar bank account, these high-yield savings accounts would give you 4-5%. The higher rates were usually associated with internet-only bank accounts. They passed along the savings of not having to staff live tellers to help them face-to-face.
And like all of our home equity lines of credit, those days are gone. The Fed pegging interest rates at basically zero to make it cheap to borrow, but it also punishes savers. So sure, a 1% rate is “high-yield” relative to the 0.1% you’ll get for having under $10,000 at Chase in a regular bank account, but it seems weird to keep calling them “high-yield” relative to their former levels. Because when you compare those two, the only thing that is high are my eyebrows.
Phil sent in this tip using the Consumerist Mobile Tipster app for iPhone.