I’ve always used pitiful high-interest savings accounts (HISAs) with rates of ~0.5% and never really thought about it. But since interest rates have been rising over the last few months, I looked into it.
What unfolded was me accidentally learning how to get the best interest rate from your online bank/s of choice. Here’s everything I did to get the best rate possible.
Background: I had about $20K that was sitting in a Big Bank savings account, and I had about $5K that was sitting in my Tangerine account. Both of these had interest rates of ~0.5% or lower.
Step 1:
I opened up a brand new EQ bank account after learning they had an automatic 1.5% interest rate on their savings accounts. (It’s since jumped to 1.65%.)
Step 2:
I transferred about $15K from my Big Bank account to my EQ account. (All of my transfers in this process were free by the way.)
Step 3:
I transferred $5K from my Tangerine account to my EQ account. At this point I had $20K sitting in my new EQ bank accounting earning 1.5% interest. I was ready to call it a day and leave things, but then….
Step 4:
I *coincidentally* received an email from Tangerine the same day that I transferred my $5K out of that bank account. This email offered me a 2.8% interest rate on any new money going back into that account until October 31st. I called Tangerine to make sure it worked how I imagined it would, and that putting the $5K “back” plus more would all count until this 2.8% rate, and they confirmed.
Step 5:
I researched online and learned that this technique is a “thing”. I’m not sure if it has a name, but let’s call it in the HISA Transfer Boogie. Basically, online banks will generally only offer you the best HISA rates when you take your money elsewhere! People online are hip to this, and bounce between interest promo rates at various banks. Basically how it works is, you transfer money out of your online bank account, wait for them to give you a promo offer to return, transfer your money back (plus more if you can afford it), earn that sweet promo interest, and at the end of your promo term, transfer your money out again, which will trigger another promo email. Lather, rinse, repeat.
Step 6:
I transferred the majority of my money to Tangerine to take advantage of this promo rate. Though the interest rate is based on a yearly percentage, it pays out monthly, which is awesome since you don’t need to lock your money into the promo for the whole term to see earnings.
Step 7:
I wait and earn! At this point, I’ve earned ~$30 after 1 month and I’m thrilled. Sure, it’s not much, but it sure as heck beats the literal pennies I was making before. On October 31st, I’ll trick-and-treat myself by transfering all the money to EQ bank, and hope Tangerine offers me another good promo deal. And if not, I’ll still be getting one of the best HISA rates going.
Happy saving,
Squirrel
