High-Yield Savings Accounts: Profit per Account

Profit per Account

In the post, “Which High-Interest Savings Account Should I Get?” we listed the best options for ordinary savings accounts and also for mega high-yield options which come with strings attached. With the semi-demise of the Netspend cards, I thought it would be neat to take a look at how much each of these high-yield accounts nets annually in dollars rather than in percentages.

The idea here is that each added account is an additional headache to deal with. All of the accounts have requirements to get the bonus interest rate, such as making 10 or 12 debit card transactions, spending $500 or $1,000 on their card, logging in monthly, 90-day inactivity fees, among other things. And I find that each added account takes up virtual real-estate in my head.

Thus, when determining whether to add an account or not, the decision revolves partially around the net total I’ll get from the account, irrespective of the APY rate offered. Of course, the APY is important too, and so is the level of hassle inherent to the account. Hassle levels vary greatly from one account to the next as some accounts are easier to deal with than others.

In this post, we’ll look just at the dollar net, not at the APY rate or hassle involved. See the original post for more details on those aspects.

Opportunity Cost

To give a baseline for these calculations, we’ll assume that you have a 1% savings account, for example, an Ally Savings account. There are a bunch of other options slightly higher or lower than that, but we’ll use that as an easy vantage point. If you’d put $5,000 in a 1% Ally account, you’ll have $5,050 in the account after a year. We’ll call this Opportunity Cost.

Another Opportunity Cost that comes up occasionally is the need to put spend on the bank’s debit or credit card and forgo credit card rewards. We’ll factor that in as well.

Note that the exact calculations involving APY are difficult to compute since it depends on how often it gets compounded, whether you pull out the interest or reinvest it, among other factors. Hopefully, I got close.

Consumer’s Credit Union – 4.59% APY

Read our post on CCU here

  • Interest Rate: 4.5% on $20,000
  • Annual Cash Total: $900
  • Opportunity Cost: -$200

This account requires spending $1,000 on a CCU credit card. The card earns just 1% cash back so let’s deduct $120 from our Annual Cash Total. (You could do better if you spend at the grocery store and get 3% back, but let’s keep it simple.)

  • Opportunity Cost: -$120
  • Total Net: $580

For going through the trouble of adding the CCU account to my arsenal, I’ll net an extra $580 annually.

One good thing about CCU is that they recently underwent a devaluation so hopefully the current rates will stick for a while.

Northpointe – 5% APY

Read our post on Northpointe here

  • Interest Rate: 4.91% on $10,000
  • Annual Cash Total: $491
  • Opportunity Cost: -$100
  • Net: $391

For going through the trouble of adding Northpointe to my arsenal, I’ll net an extra $391 annually.

Main Street Bank – 2.25% APY

Read our post on Main Street here

  • Interest Rate: 2.225 on $25,000
  • Annual Cash Total: $556
  • Opportunity Cost of 1% Account: – $250
  • Final Net: $306

For going through the trouble of adding this Main Street account to my arsenal, I’ll net an extra $306 annually.

Caveat: This account is tougher than the rest since they require that your activity should appear as your main checking account.

Lake Michigan Credit Union – 3% APY

Read our post on LMCU here

  • Interest Rate: 2.96% on $15,000
  • Annual Cash Total: $444
  • Opportunity Cost of 1% Account: -$150
  • Final Net: $294

For going through the trouble of adding LMCU to my arsenal, I’ll net an extra $294 annually.

One American Bank – 3.5% APY

Read our post on One American here

  • Interest Rate: 3.44% on $10,000
  • Annual Cash Total: $344
  • Opportunity Cost of 1% Account: -$100
  • Final Net: $244

For going through the trouble of adding this One American account to my arsenal, I’ll net an extra $244 annually.

Also note that recently we got one tentative data point indicating opening this account is just a soft pull.

Mango Prepaid Card – 6% APY

Read our post on Mango here

  • Interest Rate: 5.85% on $5,000
  • Annual Cash Total: $292.50
  • Opportunity Cost of 1% Account: -$50
  • Monthly Fees: -$36
  • Final Net: $206.50

For going through the trouble of adding Mango to my arsenal, I’ll net an extra $206.50 annually.

The caveat here is that this account requires spending $800 per month on the Mango debit card. If you use a debit card instead of a 2% credit card, it will virtually wipe out any gains from this account.  However, if you use it for debit-only transactions which wouldn’t work with a credit card, the account can make sense to get.

Alden Credit Union – 5.125% APY

Read our post on Alden here

  • Interest Rate: 5% on $5,000
  • Annual Cash Total: $250
  • Opportunity Cost: -$50
  • Final Net: $200

For going through the trouble of adding this Alden account to my arsenal, I’ll net an extra $200 annually.

Great Lakes Credit Union – 3% APY

Read our post on GLCU here

  • Interest Rate: 2.96% on $10,000
  • Annual Cash Total: $296
  • Opportunity Cost of 1% Account: -$100
  • Final Net: $196

For going through the trouble of adding GLCU to my arsenal, I’ll net an extra $196 annually.

Insight Prepaid Card – 5% APY

Read our post on Insight here 

  • Interest Rate: 4.91% on $5,000
  • Annual Cash Total: $245.50
  • Opportunity Cost: -$50
  • Final Net: $195.50

For going through the trouble of adding Insight to my arsenal, I’ll net an extra $194.50 annually.

Netspend Prepaid Cards – 5% APY 

Read our post on the Netspend cards here

  • Interest Rate: 4.91% on $1,000
  • Annual Cash Total: $49.10
  • Opportunity Cost: -$10
  • Final Net: $39.10

For going through the trouble of adding Netspend to my arsenal, I’ll net an extra $39.10 annually.

Two notes:

  • There are actually numerous Netspend cards, and you can net $39.10 from each one.
  • Many of us already have some Netspend cards set up and that might sway us to keep the cards for the extra $39.10 profit. Personally, I think I’ll close out all my Netspend accounts so as to simplify my life.

Totals

For easy comparison, here are the profit totals after factoring in opportunity cost (not the actual amount of money you’ll get, but what you’ll get more than using a 1% account):

  • CCU: $580
  • Northpointe: $441
  • Mainstreet: $306
  • LMCU: $294
  • One American: $244
  • Mango: $206.50
  • Alden: $200
  • GLCU: $196
  • Insight: $195.50
  • Netspend: $39.10 per card

$5,000 Baseline

Suppose you only have $5,000 to put in a savings account. Here’s the profit you’ll get by using these accounts after deducting the opportunity cost (again, this is not the amount of money you’ll actually get):

  1. Mango: $206.50
  2. Alden $200
  3. Insight: $195.50 (same for Northpointe and for 5 x Netspend)
  4. One American: $122
  5. LMCU: $98
  6. GLCU: $98
  7. Mainstreet: $61.25
  8. CCU: $55 ($225, minus $120 for the credit card use, minus $50)

Final Thoughts

I actually had a better time putting together this post than anticipated, and I found it interesting seeing how the numbers played out.

We based our Opportunity Cost numbers on a 1% APY account such as Ally. If you have an account that earns more (we’ve seen recently some 1.2% or 1.1% options), the profit numbers calculated above go down slightly.

Also keep in mind that we only went through the nationally available accounts, but be sure to check out the locally available options too to see if you can get something better. There are also a whole bunch more local options that offer 3% APY which we haven’t yet posted about.

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54 Comments
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SV
SV (@guest_1588368)
March 30, 2023 12:53

 Chuck The page for High Interest Savings account is showing an error? Looks like the page is down?

DaWoodMan1
DaWoodMan1 (@guest_556737)
February 1, 2018 19:02

Great post! Bank bonuses and high yield savings are the next step on my Financial learning curve. I’ve played the CC game pretty darn well so far, but it’s time to start actually saving/earning cash money instead of just maximizing my returns on spending. 2018 may not be the year but hopefully 2019 will be.

Cole Gleason
Cole Gleason (@guest_432987)
July 3, 2017 21:52

Why is the opportunity cost on Northpointe not -$100 ($10k at 1% in Ally)?

sam
sam (@guest_276252)
July 15, 2016 18:55

Hello guys!
Please make new UPDATED thread (article).
1. With all still existing and new banks.
2. Sorted from the best (where is no fee, direct deposits, and debit purchases etc.) and highest interest to the lowest and more hustle accounts.
This is my Home Work: )
– One American Bank – 3.5% APY Rewards Checking Account On Up To $10,000
– Insight 5% APY Prepaid Card on up to $5,000
– Mango 6% Rewards Checking $5,000 (Direct deposit required: Yes, minimum of $500 per month. ($3 fees per month SO $36 per a year) (also direct deposit required- such as paypal direct deposit)
– Control Card 5% APY On Up To $5,000 (plus – Two or three different little fees! I didn’t calculate the fees)
– Northpointe – 5% APY for $5,000 balance (Will get total only $68 (if count OPPORTUNITY COST and $6,000 expenses for debit card – for which I can get $120 back – 2 point (0.02 = 2% ))
– Union Plus Prepaid Review (5.10% APY + $20 Bonus) up to $5,000 (direct deposit required- such as paypal direct deposit)

Thanks.

sam
sam (@guest_276825)
July 18, 2016 13:44

Chuck, You can always categorize:
1. Just open account and make a deposit and do nothing after.
2. Open account and make direct deposit.
3. Open account and there is a fee.
4. Open account and make Debits Purchases.
5. Open account fee PLUS Debit purchases, or Direct deposits and fees, or Debit purchases and fees.
))
But as I see, there are no many banks with HIGH APY left, maybe required at least 12 debit purchases per month. And some in all states, some in one state of few.
https://www.depositaccounts.com/checking/reward-checking-accounts.html
And here
https://www.depositaccounts.com/kasasa/

John
John (@guest_276704)
July 17, 2016 18:16

Sam,
If Control Card is a rebrand of Netspend, then isn’t it just 1K instead of 5K?
Also I thought Union Plus was shutdown cause I remember receiving a check from them

Thanks

sam
sam (@guest_276823)
July 18, 2016 13:36

John, hey, in their Terms and Conditions “If the Average Daily Balance is $5,000.00 or less, the interest rate paid on the entire balance will be 4.91% with an annual percentage yield (APY) of 5.00%.” https://www.mycontrolcard.com/how_it_works/what_it_costs.shtml
You are right, my bad – Union Plus Prepaid Debit Card – is shutdown I think forever!

sam
sam (@guest_277664)
July 21, 2016 21:53

“5.00% APY on balances up to $5,000” NETSPEND https://www.netspend.com/about_netspend/

John
John (@guest_279148)
July 28, 2016 00:23

It mentions “5.00% APY on balances up to $1,000”

sam
sam (@guest_279892)
July 31, 2016 11:56

lol, netspend just changed it, I copy info about 5.00% APY from their site 6 weeks ago…. less and less bank offer 5.00% APY, almost none, soon probably will be none! LOL and on their another affiliation bank “CONTROL” changed it too ($1,000 – 5.00% APY). I gonna close it all!

Jeff
Jeff (@guest_271193)
June 28, 2016 10:18

Small point, but Northpointe’s website lists their interest rate as 4.89% (5.00 APY), not 4.91. Not sure if this would make a difference in the calculations.

John
John (@guest_264837)
June 2, 2016 18:27

Chuck, would be good to also add the hard pull. I would value a hard pull at $500 (since you typically get 50,000 miles with a credit card) so it would reduce CCU to $80.

anthonyjh21
anthonyjh21 (@guest_264885)
June 2, 2016 23:45

Yeah I’m not overly concerned with a hard pull as it’s temporary. Where I place value is on opening a new line of credit, including it’s impact to AAOA.

Anyone considering CCU 4.59% specifically should pay close attention to this because it’s not of direct consequence and they may regret it later (hello 5/24).

Barry
Barry (@guest_264812)
June 2, 2016 17:06

I meant 1%, not 15 in above post

Barry
Barry (@guest_264811)
June 2, 2016 17:04

I don’t have 20 years to wait…Chuck left out the most important (I think) part of CCU. The US based customers service. I had this acct for over 2 years. I had to withdraw 18k in an emergency situation last year. I called them an spoke with an actual human who answered the phone. They are great and I didn’t want to close the acct. They told me they will keep accts open with absolutely no fees and they are true to their word. Their service is worth something and my time (holding on ) is valuable. So I will xfer 4 netspend accts. on 7/1. The only problem is the 12 debits. They only allow 4 charges per store per day. So I use the self checkout at Shoprite 4x/ then Dunkin Donuts for 3/4 separate charges and in 2 days done. The drawback is the 1k spend on CC, but at last you get 15 which covers the VGC fee.. I recommend this route.

Victor
Victor (@guest_264752)
June 2, 2016 13:45

I’ll just throw out there that’s there’s always the (implied) 3.5% APY guaranteed by US Series EE Savings Bonds, which you can buy through the TreasuryDirect website. The actual interest rate is currently negligible (0.10% through Oct 2016), but the bonds are guaranteed to double in value after 20 years, which implies an APY of 3.5%. Think of it as a 20-year CD with a very severe early withdrawal penalty. If you think interest rates will remain low, they are a decent risk-free option. Interest is also exempt from state and local tax, and you can defer paying taxes on the income until you redeem the bonds. Now that the 5% Netspend accounts have been “neutered”, this option may look decent to some (risk averse) people who are looking to put money away for a while.

Victor
Victor (@guest_264823)
June 2, 2016 17:28

There is no explicit penalty, but since the actual interest rate is so low, if you cash in the bonds before they double in 20 years, you will be left with just what paltry interest they’ve earned. For example, if you were to buy a $100 bond today (earning 0.10%) and cash it in after 19 years, you’d only get about $102, vs $200 if you wait another year. You can cash them in after 1 year. Interest gets paid every 6 months.

Dan
Dan (@guest_264735)
June 2, 2016 13:00

I think instead of (or in addition to) using the maximum account value, you should used a baseline like $5000, so you can see what the same amount of “investment” gets you from each account. Of course the APY technically does that, but doesn’t show all of the other “fees” you did account for.

I’m also not sure about the 1% opportunity cost being included, or at least not shown with and without, as not everyone has a savings account close to that high right now. It’s easy enough to calculate on your own, but just for comparison’s sake. Make a big table would be useful as well.

anthonyjh2
anthonyjh2 (@guest_264747)
June 2, 2016 13:36

I like the baseline being $5k for simplicity.

I don’t agree with the 1% being removed. Anyone can open a 1% savings account in a matter of minutes. I think his listing opp costs was actually a great part if this post. If anything, there should be further costs included such as your value of a new credit card or a hard inquiry.

I don’t however believe we should get into taxes here. Perhaps a disclaimer could be provided, but these posts have to walk that line of being comprehensive yet also digestible and easy to read for the masses.

Steve
Steve (@guest_264775)
June 2, 2016 15:15

> as not everyone has a savings account close to that high right now.

Anyone can open a Discover or Ally account.

I agree that it should be recalculated as APR – Fees (assuming max).