For years I earned the lackluster interest rate that most traditional banks pay, a mere 0.10%. Thinking of it, the interest received did not even keep pace with the cost of inflation. It always fascinated me and sometimes angered me, to learn that banks lend customer’s money to borrowers for 6% – 8% interest rate, sometimes even for more, while they pay their customers a measly less than 1%.
I remembered calling the customer service at my financial institution to share my frustration about the interest payments, and the agent informed me about relationship banking rates.
So what are relationship banking rates and why didn’t I know about them before? Relationship banking rates are higher interest rates paid to customers who have multiple bank accounts or financial products (example: certificates of deposits, credit cards, investments, etc.) with the financial institution. The financial institution basically rewards you for the business that you give them. Please note that you have to explicitly communicate that you would like the relationship banking rate, as it is not automatically earned, even if you have multiple accounts and is eligible. Another thing to note, some financial institutions require that the combined value of all your accounts or financial products must be at a certain value to qualify. Please check with your financial institution to see what that minimum is, and see if you already meet the requirement to earn a higher interest rate.
As a result of taking advantage of the relationship banking rates, my rate increased from 0.10% to 1.69%. The only thing I have to do to maintain my higher interest rate is to have direct deposits of at least $5,000 per month or use my credit card/debit card for at least 5 eligible purchases. If I fail to meet either requirement in a specific month, then my interest rate defaults to 0.10% for that month.
Now that is how you make your money work for you! If you are not already taking advantage of relationship banking rates at your financial institution, please be sure to check it out! You could possibly earn up to 18 times more interest than you do now, just like me!
If you upgrade your interest rates after reading this post, please be sure to leave a comment below! I would love to hear about it.