The Ultimate Interest Rate Chaser Calculator
Thinking about moving your cash to a higher interest rate? There are a lot of banks paying 5% interest or more out there. Many are online, but some might already be in your neighborhood.
Next, use this handy calculator to find out how much more money you’ll be looking at:
Notes
- This calculator is based on a rate-chasing breakeven time formula developed previously which takes into account the “days of lost interest”, or the time in between transfers where the money is not earning interest in either account.
- Although you will get a very similar answer either way, note that it asks for APR, not APY. I also made a APY to APR calculator if you only have APY and want to be exact.
- Usually, there can be between 0-3 days of lost interest when going from one bank to another. This depends on the policies of either bank and also which bank initiates the transfer. This value greatly affects the break-even time. I did an experiment that lists some example times.
- The 6-month value (182 days) isn’t simply 6 times the 1-month value (30 days), as the calculator takes into account the time needed first to “break-even”.
Examples and Discussion
Scenario #1:
Moving $2,000 from Bank A @ 5.0% APR to Bank B @ 5.5% APR. If there is 1 day of lost interest, even the difference of 0.50% APR only results in a projected gain of less than $5 ($4.68) after six months.
Scenario #2:
Moving $50,000 instead from Bank A @ 5.0% to Bank B @ 5.5%. If there is no lost interest, the projected 6-month gain is about $125. If there is 3 entire days of lost interest, the gain is still $102.
To some people, either scenario might not be worth the effort. To others, transfers don’t take long to set up and extra money is extra money. The purpose of this calculator is to present the facts and let the user decide for themselves. Comments like “rate-chasing is stupid” are not productive.
Another factor to consider is how likely the current rate difference will persist.
Feedback is welcome.
Find more in Banking, Tools & Calculators | 10/22/06, 10:19pm | Trackback
October 22nd, 2006 at 11:38 pm
Thanks! Very helpful.
October 23rd, 2006 at 1:17 am
Very useful calculator! It shows that it is sometimes not worth transfering to another saving acct
October 23rd, 2006 at 6:35 am
Thanks. Every cent counts if it is worth the effort. And this helps in making that decision.
October 23rd, 2006 at 7:25 am
It would be helpful to see the APY in the results as well since many banks quote that instead of the APR. Or maybe allow the user to input either.
I’ve made something similar to this in excel. I usually count on 5 days of lost interest. It could be less if I scheduled both moves into and out of my checking account at the same time, but then I risk problems if the deposit doesn’t go through. The time also depends on the bank. CapitalOne has slow transfers, it probably takes at least 5 business days for a transfer to show up in my checking account. Emigrant does it in about 2 business days. I think GMAC has fast transfers as well.
October 23rd, 2006 at 9:13 am
This is what I’ve needed for a while now. Back when all the online banks were flip-flopping back and forth and I was always tempted to toss money back and forth, this would have made my decision very very easy to make. Good job.
October 23rd, 2006 at 10:48 am
hmm nice calculator Thanks!
October 23rd, 2006 at 12:36 pm
Good calculator Jon, Thanks!
October 23rd, 2006 at 2:11 pm
thanks. very handy calculator
October 23rd, 2006 at 2:54 pm
This is good, but if I’m also continuing to contribute money into my new savings account, the break-even point becomes smaller due to the compounding of the extra money. This calculator only works if you don’t plan on adding any more money into the new account.
October 23rd, 2006 at 9:20 pm
The calculator is interesting and helpful, I guess, but I’m not so sure given the examples. Take scenario #1, where you say with the 1 day lost interest, “even the difference of 0.50% APR only results in a projected gain of less than $5 ($4.68) after six months.” This shouldn’t really be surprising, given that 0.5% interest on $2000 for 6 months is only $5 in the first place, with NO lost days.
In other words, with a day lost, you’re out 32 cents, which means, to me anyway, that whether it is worth it to chase the higher rate is hardly affected by the lost interest.
October 25th, 2006 at 12:26 am
The first example is primarily to show that moving around $2,000 may not result in that much money. The lost days is just something I had to put in.
If you are not using any sort of high-yield savings, the calculator can also be used to see how much interest you are missing out on.
October 25th, 2006 at 1:48 pm
I would also caution to take into account, the weekend days. When you say 1 day of lost interest, you mean 1 business day. So, be careful when you initiate the transfer. Fro example, with HSBC, I once made a mistake of initiating the transfer on a Wednesday. This was the time they used to take 3 business days for the transfer. Anyway, they took the money out of my other bank on Thursday, but did not post to my HSBC account till the following Monday. So, I lost 4 days interest. (Thu, Fri, sat and Sun).
November 2nd, 2006 at 5:27 pm
I thought you might like to know that a transfer from Etrade Money Market to Citibank e-savings (currently 5.00% APY) takes exactly one biz day. I initiated the transfer yesterday from Etrade, and today it shows up in my Citibank account. Whether or not they immediately start accumulating interest at Citibank is another question, but it says funds available for withdrawal.
That has got to be the quickest I’ve seen. I have HSBC, Emigrant, ING and another Wells Fargo account and all those take at least 3 biz days if not more.
November 14th, 2006 at 4:29 am
Dumb Question of the Day: Let’s say that the first bank has an interest rate of 4.89% and an APY of 5%, and the second bank has an interest rate of 4.93% and an APY of 5.05%… is it only the interest rate that makes a difference, for purposes like that of this calculator?
As usual, I’m ‘foozed.
November 14th, 2006 at 11:06 pm
This is a great resource! I’ve always thought about lost interest but didn’t take the time to work out all the calculations… and I didn’t realize how fast lost interests adds up vs how much (little) benefit you get!
But the last time I moved it was actually because I couldn’t stand the site (Amboy Direct)… so I guess I paid close to $10 in lost interest for a better customer experience at HSBC.
One little detail that would be nice is for you to show a field showing exactly how much interest (per day and total) was lost. I know it’s easy to calculate onesself, but I’d like to see that little calculation.
November 16th, 2006 at 12:47 am
Amanda - That’s a good question. I decided to keep this calculator simple and ignored the compounding frequencies (and an example form to fill out and look up). Thus, I just ask people for APR. If you just use APYs for both the answers will be similar.
January 28th, 2007 at 4:47 pm
[...] If you don’t use HSBC, check out my Ultimate Interest Rate Chaser Calculator to help decide if it’s worth the hassle to move money over. Currently most other similar online banks are earning about 5.00-5.25% APY. You’re really looking at a maximum of 3 months of an extra 1% APY, after which most likely the rate will drop back down. This equates to roughly $20-$25 extra for each $10,000 you move in (the lower estimate takes into account the likely lost interest during transfer). [...]
January 31st, 2007 at 2:35 pm
[...] This is good news for anybody that has been keeping their money in Emigrant Direct or some other bank as you can do a quick calculation with the Rate Chaser Calculator to see how much more money you will earn in interest during their promotion. [...]
February 7th, 2007 at 7:51 pm
This HSBC is cool and so the rate chaser calculator. HSBC is giving 6% for ~3months and then 5.05% after that. I just wondering is there a calculator for $100,000 on 6% for 3 months and then 5.05% 3 months after that $100,000 with 6% for 3 months? I don’t think you would earn an overall of totally 5.5% APY divided by 2.
March 1st, 2007 at 7:31 am
Please calculate HSBC on $1000000 assuming the money could arrive by 3/5 and will remain in the bank until 12/5. How does this compare to a bank offering 5.25 compounded daily. HSBC compounds monthly, I think. Just discovered your blog—Love it!!!
March 15th, 2007 at 3:56 pm
Think you lost 4 days of interest, mine took 6 because of the weekend. Guess what, when I move it out of HSBC, I’ll loose another 4 to 6 days. So much for their 6% BS. Someone is making a killing on the float.
I’m cutting my losses and moving out of HSBC, hope to never hear thier name again.
Suggest you use caution….
March 19th, 2007 at 7:48 am
[...] sitting in ING just in case they ever raise their rates significantly. I like Emigrant the most. The Ultimate Interest Rate Chaser Calculator ? My Money Blog This link is kind of interesting to play with some numbers to see how much you would gain/lose by [...]
May 8th, 2007 at 3:53 am
Any feeling about FNBO at 6%.
Anyone familar with them
May 16th, 2007 at 6:50 am
Jonathan, do you have any thoughts on Amtrust Direct money market savings account offering 5.36. Thanks Ken
May 28th, 2007 at 4:20 am
i just opened an account at FNBO. my experience thus far has been ok. 6% until end of sept. then it adjusts….prior to their 6% promotion, they were 5.25%. My issue with this company is it takes then a while to post funds to the account. My money left my checking account on a tuesday and did not get crdited until thursday. so 3 business days…..which is much longer than emigrant or e-loan which are usually 1 business day. so this calculator is perfect for considering whether to jump for the higher 6% rate.
aside from the slow crediting, i have no other complaints.
December 2nd, 2007 at 11:46 am
also worthwhile to consider the temporary lock-in of promotional rate.
i currently have my savings in fnbodirect.com (at 5.05 rate) but the fed is likely to lower rates at the FOMC meeting on december 11. this is almost guaranteed to lower rates across the board.
because of this, i am considering switching to amtrustdirect.com who has a 5.26% rate which is locked for 90 days.
so even though the calculator with the current rates 5.05 vs 5.26 minus the missed days isnt too appealing over 6 months — the future rate outlook does play into this — could end up 4.5 vs 5.26..
or maybe i should lock in a cd for 6 months or so with the fed rates cetain to decline… waa.
January 17th, 2008 at 8:37 am
[...] is a calculator that let’s you compare how much more interest you will earn with changing banks. The Ultimate Interest Rate Chaser Calculator ? My Money Blog Some of what you said about taking out $10,000 from your Roth for a first time home buyer is true. [...]
January 29th, 2008 at 5:35 pm
[...] THE ULTIMATE INTEREST RATE CHASER CALCULATOR [...]
February 8th, 2008 at 11:34 am
Ive found the best way to get around this is find a bank or credit union that allows you to fund the new account with a credit card– then youve got 2 interest bearing account gaining interest for a short period AND you get the rewards on the CC…BINGO!
February 8th, 2008 at 3:29 pm
[...] Rate Chaser Calculator [...]
June 24th, 2008 at 1:28 am
Hi i want a calculation of a loan interest calculator.
Scenario:
X loan is taken with processing fee y and the monthly EMI is z. Suppose i need to repayment my amount in 50 days instead of 30 day. so what would be the efective interest rate if i wan to calculate on 30 days calculation.
please provide the calculator for the same.
July 25th, 2008 at 4:28 am
[...] 6.06% APY. Be aware, though, as it’s very unlikely his rate will last much longer. Try my Rate Chase Calculator to see how much you’ll make if the rate difference is the same for a month (even that might [...]
August 28th, 2008 at 3:56 am
[...] Ultimate Interest Rate Chaser Calculator A “rate chaser” is someone who move their money to whichever bank offers the highest interest rates. For example, due to various promotions I have over 10 accounts open at various online banks. This calculator helps you figure out how much money you’ll earn by switching. [...]
August 28th, 2008 at 7:29 pm
What about the fact that the interest earned is taxable income?
Therefore, the true return depends on your tax bracket.
November 11th, 2008 at 7:28 pm
[...] you are considering moving your money from a current account or rate chasing, here is a handy tool. Depending upon your current and new interest rates and the number of days lost [...]
January 21st, 2009 at 1:14 am
It would be cool if you could adjust the calculator so that you could enter either apr or apy.
February 21st, 2009 at 5:03 pm
[...] If you’re a rate chaser, Broadway Federal is offering a pretty amazing 4.08% APY with a minimum opening deposit of $1,000. However, there is no guarantee this rate will last very long at all, and reports indicate a hard credit check. To see if it’s worth it, don’t forget my handy Rate Chaser Calculator. [...]