Here’s why a higher interest rate doesn’t always mean a better deal — and what I’m doing with my savings instead in 2025.
I used to jump at every “4.50% APY!” headline.
Every few months, a new fintech or online bank would offer a slightly higher rate.
And like clockwork, I’d move my money over. Again.
But after doing this for almost three years, I realized I wasn’t actually earning more — I was just wasting time. And worse, I was treating my cash like an investment… when it wasn’t.
The Problem With Chasing Rates
Here’s what nobody tells you:
Most high-yield savings accounts come with:
- Withdrawal limits
- Temporary promo rates
- Delays between transfers
And while you might earn an extra 0.25% in theory, in practice?
You lose days during transfer delays. You miss bill payments. And you open accounts you don’t even remember six months later.
It’s not nothing. But it’s not worth it either.
So What Do I Do Now?
Now, I keep my emergency fund simple:
- A no-fee, low-friction account
- Good mobile app
- Decent, not amazing, rate (around 3.75%)
And the rest?
I move it to where money actually grows — index ETFs, bonds, and short-term GICs.
Cash isn’t supposed to make you rich. It’s supposed to buy you time and peace.
I learned that the hard way.
If You’re Still Rate-Hopping…
I get it.
Rates feel like the last “safe win” left. But sometimes, the smarter play is to set it, forget it, and focus on what actually compounds.
High yield is nice.
But high clarity is better.