Not long ago, interest paid on cash savings and bonds was high enough to provide sufficient income to retirees without having to dip into principal or invest in stocks seeking higher income. Nowadays, earning 1% on savings is a surprisingly great deal compared to most banks and institutions paying 0.01% to 0.1%. combat this frustration, services like MaxMyInterest have sprung up to help savers maximize the interest rate they earn on savings in this historically low interest rate environment. The service optimizes your savings by moving your cash between like-titled, FDIC-insured savings accounts at various banks seeking the highest interest rate, while maintaining FDIC insurance coverage. Most importantly, the service never takes custody of your funds, and you can access and view your funds at any time.

How does the service work?

MaxMyInterest serves as a hub where you can view and manage all of your savings. The service starts by linking your existing checking and savings accounts. Next, to earn higher interest rates than those paid by brick-and-mortar banks (like Bank of America), they provide a common online application to open like-titled, FDIC-insured savings accounts at online institutions. Once you indicate a minimum balance you want to keep in your checking account, the service will optimize the excess.

Each month, MaxMyInterest reallocates your excess savings in search of the highest prevailing rates while maintaining FDIC insurance coverage at each individual bank. In return for increasing the interest earned on your savings by 0.70% to 0.90%, MaxMyInterest charges 0.02% per quarter for an annual 0.08% fee for the funds being optimized in the program. The cash not utilized in the program, such as the minimum balance left in checking, is not subject to this fee.

Which banks does it work with?

Thus far, MaxMyInterest works with checking accounts at Bank of America, JPMorgan Chase, Citibank, Wells Fargo, Charles Schwab Bank, First Republic Bank, SunTrust and US Bank. Their common application can open FDIC-insured savings accounts with the following online institutions: Barclays, GE Capital Bank, American Express Personal Savings, Ally Bank and Capital One.

Final thoughts

The opportunity to go from 0.01% earned on savings to 1.00% in this historically low interest rate environment is worth considering. In addition, as interest rates start to slowly rise, having a service that automatically reallocates your excess savings in search of the highest interest rates will be of even greater value. This service is ideal for those who want to increase the rate on their cash and provide max protection for those with over $250,000 in savings.

Merriman doesn’t have a relationship with MaxMyInterest and doesn’t provide guarantees of their services, but we’ve found that their services are effective in increasing the interest earned on savings versus traditional brick-and-mortar checking and savings accounts.