How a 15-minute bank trip can yield $5,000

Finding a new bank account for cash earning zero interest can add up to real money.

Got a pile of idle dollars sitting in your checking account due to a recent home sale? Or the profits from selling Apple stock, or some other windfall? If so, you’re missing out on making more money, as most checking accounts pay zilch in interest.

But that common personal finance mistake is easy to fix with just a tiny bit of effort. There are savings and money market accounts that offer much bigger yields of a full percentage point, or even more, that will enable you to actually make some money on that cash (and which allow you to access it at a moment’s notice).

Sure, it’s a hassle to keep track of the interest you’re earning on the balance of your checking or savings account. Or searching for online banks that offer higher yields. Or taking the time to consider the offers for higher interest accounts that banks mail to your house.

But the drudgery and inconvenience are worth it, especially at a time when the nation’s central bank is raising interest rates back to more normal levels after pegging them at zero for many years. All it takes is a 15-minute visit or phone call to your bank to see what higher-yielding options are available. Or you can shop around and move some cash to another financial institution or digital bank that offers higher interest.

“While checking accounts are useful for making purchases and paying bills, they are not an effective savings strategy,” says Pierre Habis, president of PurePoint Financial. “Putting funds into a savings account where you can access it when you need to but also earn interest is a smart way to make your money work harder for you.”

I took the initiative, and it paid off. Since last August, the proceeds of my home sale have been sitting in a checking account earning a minuscule interest rate of 0.01 percent. But a light went off when an offer from a competing bank arrived offering a much higher rate in an online savings account.

I went to my local bank and shifted the extra cash into a premier money market account with a 1.70 percent annual percentage yield, or APY. That 15minute visit boosted my annual interest from roughly $30 a year to more than $5,000.

That’s real money.

Given that there are an estimated 351.4 million consumer checking accounts in the U.S, according to Michael Moebs, an economist and CEO of Moebs Services, it’s likely that lots of other Americans are leaving money on the table by stashing cash in accounts that pay little or no interest.

Data from Moebs, which provides research and consultancy services to financial institutions, shows there is roughly $527.1 billion that people could either spend or move into accounts that pay out more in interest. And assuming the 2.01 percent money market yield offered by some banks, that equates to $106 million in lost interest.