Q: Today’s question comes from Sandra. She writes: My high-yield savings account (HYSA) just dropped my APY from 4.6% to 4.5%. I’d like to transfer funds to a higher-interest account. What’s the best way to do that? Can I transfer it directly from one to another? Or do I need to transfer it back to my brick-and-mortar bank first?
A: Thanks for your question, Sandra. While the rates can be great with high-yield savings accounts or HYSAs, fluctuation is common.
If you’d like to close this account and move your funds to another that’s giving you a bigger bang for your buck, I would go ahead and first, formally open the new account. Then, see if there’s an option to link your current account using your account and routing numbers. There might be, but there might not be.
If the latter is the case, then you’ll need to close your current account, receive the funds via check, deposit them into your brick-and-mortar bank account and then, link that account to the new HYSA to fund it.
One parting caveat, though. Before you initiate any of this, you will want to look carefully at what the transfer policies (including potential limits and fees) for each of the institutions are. And note, with interest rates headed down, if you want to lock in a higher return for longer, a CD may be a better bet. Good luck!
