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I have a saving account which can earn at most 0.25 %p.a on BANK A.

I have another despoit account in BANK A for my daily usage.

I found BANK B is offering 0.4% per year for the saving account.

The interest rate is tempting for me to save at BANK B because it's almost double.

I know I have flexiblilty to tranfser and manage money between two accounts of my BANK A.

but BANK B interest rate is so tempting for me too.

Question

  1. Should I close saving account of BANK A and transfer all money to BANK B?

  2. Should I left some money for some category (eg.Emergency Fund) in BANK A and open a new saving account in BANK B and move the rest of money to it?

  3. or better idea?

PS: For BANK A accounts: mostly I don't touch the money from saving account to which transfer automatically from my deposit account. but I do sometimes deposit left over money to it from my deposit account at the end of every month manually too.

I am quite stuck for this situation.

Edit: I know I have to check the terms and condition at the BANK B too :)

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So for each thousand dollars saved you will earn $1.50 more each year.

It is up to you to decide whether it is worth the hassle.

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  • 1
    +1 for pragmatism indeed! In another question, OP @kitokid says that $300 is being saved per month, and the hassle of going to Bank B to deposit that money each month must be weighed against the interest that would be foregone by making deposits once each quarter etc.
    – Dilip Sarwate
    Jul 13, 2012 at 11:40
  • I know at last, I have to make up my mind myself :)
    – kitokid
    Jul 14, 2012 at 1:17
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The rate itself is too small and the difference is small as well ...

The cost of switching, even one visit to the Bank B, would cost you around $50 just to open an account you would have to visit once ...

Think of changing if there are other benefits [like utility payments online, or integrated brokrage accounts etc] if they are same, just stick with it.

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    On his $1M deposit, that's $1500. He never mentioned his balance, though.
    – JTP - Apologise to Monica ♦
    Jul 13, 2012 at 18:05
  • @JoeTaxpayer True, but if the question were "If I see a $500 bill lying on the sidewalk, should I stoop to pick it up?" the answer might be different if the "I" asking the question were Warren Buffett or Bill Gates than if it was most other people. In another question, the OP stated that he was putting away $300 per month into savings, and it seems reasonable to assume that he does not a $1M deposit.
    – Dilip Sarwate
    Jul 13, 2012 at 19:44
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    But that wasn't the question, and I didn't read the other one stating the $300/mo. I upvoted this answer and my remark was tongue-in-cheek. You are right, we assume he's at some fewer-zeros balance. On even $10,000 the $15 might not be worth the effort of moving a bank account.
    – JTP - Apologise to Monica ♦
    Jul 13, 2012 at 20:30

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