2.00% APY is below what most banks offer today, but whether it's worth keeping depends on what else that account gives you

A 2.00% APY savings account earns less than you can find elsewhere. As of early 2024, online banks and credit unions regularly offer rates between 4.50% and 5.35% APY on savings accounts with no minimum balance and no monthly fees. If your bank is paying 2.00%, you are leaving money on the table—but the question is whether moving costs you something else you value.

The math is straightforward: on a $10,000 balance, 2.00% APY earns $200 per year. The same $10,000 at 5.00% APY earns $500 per year. That $300 difference compounds. Over five years, the gap grows to roughly $1,600 in lost earnings. The longer your money sits, the worse a low rate becomes.

The real decision is whether you are staying at 2.00% because of convenience, because you do not know better rates exist, or because that account has features you actually need. If it is the first two, moving makes sense. If it is the third, you have a real trade-off to think through.

Key Takeaways

  • Most online banks and credit unions now pay between 4.50% and 5.35% APY on savings accounts, making 2.00% significantly below market rate.
  • On a $10,000 balance, the difference between 2.00% and 5.00% APY costs you roughly $300 per year in lost earnings.
  • Rates change frequently, so a 2.00% account that was competitive a year ago may no longer be, and your bank may not have raised its rate when others did.
  • Moving your money takes 5 to 10 business days and involves no fees on your end, so the barrier to switching is low unless you have other reasons to stay.
  • Some people keep low-rate accounts for reasons unrelated to interest—branch access, a linked checking account, or a relationship with a local bank—and that is a legitimate choice if you know what it costs.

Why your bank may still be offering 2.00%

Banks do not all raise their rates at the same time or by the same amount. Large national banks like Chase, Bank of America, and Wells Fargo have historically kept savings rates low because they have other ways to make money—they earn from checking account fees, overdraft fees, and lending. They do not need to compete on savings rates to keep your deposit.

Online banks and credit unions, by contrast, have fewer revenue streams and lower overhead, so they compete directly on interest rate. They have to offer higher rates to attract deposits. If you are at a brick-and-mortar bank and your rate has not moved in years, that is by design—the bank is betting you will not leave.

Some accounts do have legitimate reasons to pay less: they may offer perks like ATM fee reimbursement, no foreign transaction fees, or integration with a checking account you use daily. If you use those features, the lower rate is a trade-off you are consciously making. If you are not using them, you are just paying an invisible fee.

How to know if 2.00% is costing you money

The first step is to check what your own bank is currently paying on savings accounts. Log into your account online or call and ask the current APY on a regular savings account. Write down the number.

Then visit the websites of three to five online banks: Ally, Marcus by Goldman Sachs, American Express Personal Savings, Wealthfront, or Vanguard Digital Advisor all publish their current rates on their home pages. Credit unions in your state can be found through CO-OP Network or Alliant Credit Union's website. Write down those rates too.

If the rates you find are 2.5 percentage points or more higher than what you have, moving is worth your time. If the difference is less than 1 percentage point, the decision depends on whether you use other features of your current account. If you do not use them, move.

What moving actually involves

Opening a new savings account at an online bank takes 10 to 15 minutes online. You will need your Social Security number, a government ID, and your current address. Most banks fund the account when ready or within one business day.

Transferring money from your old account to the new one takes 5 to 10 business days if you use an ACH transfer (the standard method). You initiate the transfer from the new bank's website, and it pulls the money from your old account. You do not need to call anyone or visit a branch. There are no fees on your end.

You can keep your old account open or close it. If you close it, make sure you have moved everything out first and that no automatic payments are still drawing from it. If you keep it open, you lose nothing—it just sits there earning 2.00% on whatever balance remains.

The real cost of staying put

If you have $25,000 in a 2.00% account and you could move it to a 5.00% account, you are losing $750 per year. Over 10 years, that is $7,500 in earnings you will never see. That is not a small number, and it is not a fee your bank is charging you—it is money you are straightforward not earning because you have not moved.

The only reason to accept that loss is if your current account gives you something worth $750 per year. That might be a checking account with no fees that you use daily, or a relationship with a local bank where you also have a mortgage or a business account. But if you are keeping the account because you have not thought about it, or because you think moving is complicated, those are not good reasons.

The barrier to switching is genuinely low. The process takes less than an hour of your time spread over two weeks. There are no fees. Your money is safe during the transfer. If you have been at 2.00% for more than a year, the cost of inaction is almost certainly higher than the cost of moving.

What to watch for when you move

When you open a new account, check the rate one more time before you transfer the money. Rates change weekly, and what was 5.35% when you decided to move might be 5.10% by the time you fund the account. It is still likely better than 2.00%, but confirm.

Also check whether the account has any minimum balance requirement or any fees. Most online savings accounts have no minimum and no monthly fee, but a few require $1,000 or $2,500 to open or to earn the advertised rate. Read the terms before you transfer.

Finally, understand that the rate you see today is not locked in. Banks can lower rates at any time, and they often do when the Federal Reserve cuts rates. Your new account will not stay at 5.35% forever. But it will almost certainly stay higher than 2.00% for the foreseeable future, because online banks compete on rate and a major drop would cause them to lose deposits.

When 2.00% might actually be acceptable

There are a few situations where staying at 2.00% makes sense. If you are using that account as a holding place for money you plan to spend in the next month or two, the difference in interest is negligible—you will earn maybe $3 instead of $8. If you are at a credit union that also offers you a low-rate mortgage or a free checking account you genuinely use, the trade-off might be worth it.

If you have a very small balance—under $1,000—the annual difference is less than $30, and the hassle of moving might not be worth it. But if you have more than $5,000 sitting in a 2.00% account and you are not using other features of that bank, moving is the rational choice.

Be honest with yourself about why you are staying. If it is inertia, move. If it is a real feature you use, that is a legitimate decision—just know what it costs you.

Frequently Asked Questions

Will moving my money to a new bank affect my credit score?

No. Opening a savings account does not trigger a hard credit inquiry, and moving money between banks does not affect your credit at all. Your credit score is based on borrowing and repayment history, not on where you keep your deposits.

What if rates drop after I move my money?

You will earn whatever rate the new bank is paying at that time. If rates drop across the industry, your new bank's rate will drop too—but so will your old bank's rate. You are not worse off by moving; you are just in the same position as everyone else. The advantage of moving is that you benefit when rates are high, which they are now.

Can I move money back to my original bank if I change my mind?

Yes. There is no penalty for moving money between banks, and you can move it back whenever you want. If you move to an online bank and decide you miss having a physical branch, you can transfer the money back to your original bank. The only cost is the time it takes.

Is my money safe in an online bank?

Yes, as long as the bank is FDIC-insured. Check the bank's website for the FDIC insurance statement, usually at the bottom of the page. FDIC insurance covers up to $250,000 per account, per bank, so your deposits are protected the same way they are at a brick-and-mortar bank. Online banks are just as safe; they just have lower overhead and pass the savings to you as higher interest rates.

How often should I check my savings rate to see if I need to move again?

Check once or twice a year. Rates change frequently, but they do not change so fast that you need to monitor weekly. If you see a rate that is 1 percentage point or more higher than what you are earning, it is worth considering a move. But do not feel obligated to chase every small increase—the cost of moving is low, but it is not zero, and a 0.25% difference on a small balance is not worth your time.