The Shocking Secret Big Banks Desperately Hide About Your Savings

Your bank account isn't working for you—it's working against you.

While traditional banks pay microscopic interest rates—often below 0.5%—they leverage your deposits for massive returns through lending and investments. That 200x gap between what they earn and what they pay you isn't just business—it's systematic wealth extraction.

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Banks count on consumer inertia and regulatory capture to maintain this asymmetry. Their entire profit model depends on you not asking one simple question: Why am I settling for less?

Next time your bank mentions 'security' as justification for near-zero returns, remember: The safest place for your money is also where it actually grows.

Key Takeaways

• Big banks pay almost nothing on savings accounts, and most customers don’t realize how little they’re earning.
• Chase, Bank of America, and Wells Fargo offer as little as $1 a year on $10,000 in savings—while lesser-known banks pay hundreds more.
• Your savings are just as safe at smaller or online banks, thanks to federal deposit insurance that protects balances up to $250,000.
• Opening a high-yield savings account usually takes only minutes online, making it easy to stop settling for poor rates.
  

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How Big Banks Get Away With Paying You Pennies

It’s common knowledge that banks pay interest on savings accounts. They do so because they want you to deposit your money with them and keep it there, allowing the bank to issue loans and earn profits. What’s less understood is just how dismal the biggest banks’ payouts are. Research shows that most account holders have no idea what rate they’re earning, and the big banks take advantage of that by paying them peanuts.

The nation’s three largest banks—Chase, Bank of America, and Wells Fargo—pay a measly 0.01% on their standard savings accounts. That’s not 1 percent—it’s one one-hundredth of a percent. On a balance of $10,000, that means you’d earn a single dollar of interest in a whole year.

In contrast, putting that same amount in one of today’s best high-yield savings accounts—a process that can often be completed online in minutes—could mean earning more than $400 extra annually.

The takeaway is clear: Shopping around pays. Savings account interest rates vary widely, and the bigger banks often count on their large customer bases staying put. They assume many people don’t realize there are equally safe, lesser-known institutions offering far higher payouts—or that opening an additional savings account elsewhere can be done quickly and easily.

The Shocking Math Behind How Much You’re Losing at a Big Bank

Chase, Bank of America, and Wells Fargo each offer two personal savings accounts: a standard version and a so-called premium one that promises a slightly higher return for customers who meet certain requirements.

The three biggest banks in the U.S. have long been notorious for their stingy returns, and that continues to be the case today. Wells Fargo offers 0.01% on its standard and premium accounts. Chase and Bank of America also offer 0.01% to standard customers, along with a fractional bump for those considered “premium” or “preferred."

At Bank of America, that still only means 0.02%, 0.03%, or 0.04%, depending on your Preferred Rewards tier. With Chase, meanwhile, you’ll earn 0.02% if you LINK your savings account to a Chase checking account that you use at least five times a month.

How does this stack up against the competition? Poorly. The national average savings account rate is 0.39%, while plenty of banks are paying more than 4%—with some even going as high as 5.00%.

Here's how much those differences add up to in real dollars over a year.

One explanation for smaller, lesser-known banks being more generous is that they are hungry for deposits. Without the name recognition or massive customer bases of the big banks, they need to stand out—and offering higher interest rates is one of the easiest ways to do it. Banks primarily earn profits by lending money, and depositors supply the funds that make that possible.

Operating costs also play a role. Many of the banks offering the best yields are online-only, which allows them to save on branch expenses and pass those savings back to customers in the FORM of better rates.

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Big Banks Aren’t Safer—Here’s Why

Laziness isn’t the only reason people stick with the big banks. Another powerful motivator is the belief that money is safer with them. These are household names that have been around for decades, and many people assume they’re “too big to fail.”

The reality is that smaller banks are just as safe because they offer the same federal protections. If any FDIC bank or NCUA credit union fails and your deposits are lost, the government WOULD cover you up to $250,000 per person, per institution. That applies whether you bank at Chase or a small online bank that barely anybody has heard of.

Opening a High-Paying Savings Account Is Surprisingly Easy

Another common excuse people use for not moving their funds to an account with a higher interest rate is not having the time. 

Today, it’s easy to identify which accounts offer the best rates, and open the one that’s best for your needs. Usually, it takes just a short online application—a quick process that requires answering a few basic questions—and then making an initial transfer to activate the account.

Important

A high interest rate isn’t the only thing to look for. Make sure you also choose an account that doesn’t charge monthly fees or set a required minimum balance you’re not sure you can maintain. You’ll also want to check that the institution is FDIC- or NCUA-insured.

Transfer times between banks vary, but in most cases, your money will arrive at the destination bank in one to three business days.

With all this in mind, there’s little reason to keep settling for lousy rates. Opening a better savings account takes minimal effort—and the payoff could be hundreds of dollars or more each year.

Daily Rankings of the Best CDs and Savings Accounts

We update these rankings every business day to give you the best deposit rates available:

• Best High-Yield Savings Accounts - Up to 5.00%
• Best Money Market Accounts - Up to 4.80%
• Best High-Yield Checking Accounts - Up to 6.00%
• Best Overall CD Rates - Up to 4.60%
• Best 3-Month CD Rates - Up to 4.40%
• Best 6-Month CD Rates - Up to 4.60%
• Best 1-Year CD Rates - Up to 4.50%
• Best 18-Month CD Rates - Up to 4.30%
• Best 2-Year CD Rates - Up to 4.28%
• Best 3-Year CD Rates - Up to 4.28%
• Best 4-year CD Rates - Up to 4.28%
• Best 5-Year CD Rates - Up to 4.28%

Important

Note that the "top rates" quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is much different than the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often 5, 10, or even 15 times higher.

How We Find the Best Savings and CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that's below $5,000.

Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.