   Should I close my savings account?
  I'm in a little bit of a financial conundrum at the moment trying to figure out whether or not I should close my savings account, and I was hoping someone could shed some light on the situation.I currently have a checking account at one bank, and a savings account at another bank.  Right now I'm only making 0.05% interest in my current savings account, and after talking to one of that bank's "rate specialists" at length the other evening I found out that by opening one of their special checking accounts and upgrading my current savings account, I could bump that up to 0.15% in the savings account and 0.2% in the checking account, given the balance I'd be able to open them at.  While the checking rate is higher than the savings rate, the savings rate scales better with balance.However the issue is that I recently opened a second high-yield checking account the other day at a third bank, since I got fed up with my checking account bank and paying ATM fees every once in a while (no convenient locations given my daily routine).  Plus it was a basic account with no interest.  This checking account has 0.5% interest, no ATM fees, no balance maximums or minimums, free checks, etc.  I'm not an expert in checking accounts but it seems to me to be a pretty sweet deal.So the question is, why would I even want to bother with my savings account right now when the economy has caused the interest rates to drop so low, especially since the money is less fluid and has more restrictions anyway?  Why shouldn't I just move everything into the 0.5% checking and earn the most interest with the least amount of fees and restrictions?  On the one hand it seems like an obvious decisions, but on the other hand I feel like I'm missing something.  Why does anyone have a savings account right now?I know that it's difficult to give me personal financial advice without any more information (not that I'd expect anyone to anyway), but I'm hoping someone can at least help me understand whats going on with savings accounts these days.   
  Double check all the limits. You don't have a balance min/max, but check the fine print. Some accounts have limited amount-per-check. Some have limited transfers-per-month. Some, like credit cards, have odd conditions on when the rates are valid or rather could become invalid. Check the rate-change. My savings account doesn't seem to fluctuate all that much, if at all. But a 3 month CD for instance will fluctuate (maybe greatly) every 3 months when you roll it over. So, is that checking account 0.5% solid for the year? quarter? month? first 6 months?Can you get electronic deposit/withdraw on that account? are there fees for such transfers?There is a tonne of fine print, just be sure to go over all of it with the bank. If they aren't willing to tell you the risks, rewards, and what is overall different, then you need to find someone else to bank with.   ;  If a high-yield is only paying .5% where you are, then seriously who cares? If it's your current account (is that what a checking account is, different names in the UK?) then you presumably don't keep serious amounts in there  -if you have money you want to make interest on put it in something that can achieve this.   ;  Is this ally bank?  If so, just do the checking with interest and get a savings account there too.  The savings is 1.5% I think.  YOu can transfer between the two instantly and there's no minimums.  So if you take it down to $1 there's no penalty.  So just leave the normal amount in your savings, and if you need it, transfer it to the checking.   ;  Wow... that's some terrible savings interest.  You should switch to something like ING Direct or similar if you want a savings with an interest higher than 1%.To answer your question more directly-- you're not going to make money on savings right now.  If you have ANY interest-based payments (House, Car, whatever), I'd encourage you to put what money would be savings into extra payments into that first.  Take the following example:Savings at 1.5% Interest (gain)Mortgage at 5.5% Interest (loss)Car Loan at 7.0% Interest (loss)If you had $100, it would be better vested by paying that extra $100 into your Car Loan to pay down the principal, over the other two options.  Do keep enough money in savings for a rainy day though.  But beyond the 'oh crap' cushion, it's pretty pointless in the current economy.   ;  Necreia's right.  Pay off any debts first.  Close the savings account.  You're not going to need it.  And don't worry about the current interest rates.  1.5% vs 0.5% vs 0.2% vs 0.05% doesn't mean jack unless you've got over 1 million dollars in the bank.  For example, say you have $10,000 to put in an account right now.  1.5% will earn you $150 a year, a 1/2% would earn $50, 1/5% yields $20, and 1/20% yields $5.  Let's be more modest and say you only keep an average of $1000 in your account.  Divide those yields by 10: 15$ vs 5$ vs 2$ vs 50 cents.  Pathetic, isn't it?   ;  Thanks everyone for the advice!  I checked all the fine print for the new checking account and there didn't appear to be any limits or hidden fees, and a conversation with customer service seemed to confirm that.  However I see now that it isn't the best interest rate, so I might keep looking around.  My banking needs are pretty simple, so as long as I don't have to pay service or ATM fees I should be happy.@necreia: Thanks for confirming that savings accounts are indeed crap at the moment and I'm not going crazy! :)   ;Quote:Original post by d000hgIf it's your current account (is that what a checking account is, different names in the UK?)In the US, there are two types of basic accounts - savings and checking. Savings accounts are typically isolated from your check card (Visa, MasterCard, etc.) that is linked to your account and have higher interested rates. Checking accounts are what you use to spend, and are what your check card and checks are linked to. They have lower interest rates (if at all), but are more readily reachable for spending.Though, given the current economy and how low the interest rates are, I wouldn't say there is even much of a point to savings accounts due to their interests rates being lower than the rate of inflation. There are slightly more fruitful, low risk ways to invest your money, such as CDs and savings bonds.   ;  My "high yield" savings account went from 5.0% to 0.4%. Bleh. I guess even at that, it's still one of the better rates out there.If you have money laying around and you know you won't need it for a while, consider investing it. You could make ~6% in dividends with companies like AT&T, Verizon, and other telecoms and utilities. But like i said, i don't recommend doing anything like that unless you have no specific plans for your money for the next 1-3 years.;  The interest rate that you can get in CD's is also really low at the moment. My annual CD just got renewed at about 1/9th the rate as it was previously.   