The Ultimate Interest Rate Chaser Calculator

Thinking about moving your cash to a higher interest rate? Use this handy calculator to find out how much more money you’ll be looking at:

How much money are you going to move? (no commas) $
Enter the interest rate (APR) currently being earned:   %
Enter the new interest rate (APR):   %
How many days of lost interest will you have?   day(s)
The approximate number of days you must keep your money at the new rate to break even money-wise is:   days
Assuming the rate difference remains the same,
in 1 month you’ll have earned an extra (estimated):
  
After 6 months, you’ll have earned an extra (estimated):   

Notes

  1. 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.

  2. 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.
  3. 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.
  4. 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.

Comments

  1. Thanks! Very helpful.

  2. Very useful calculator! It shows that it is sometimes not worth transfering to another saving acct

  3. Thanks. Every cent counts if it is worth the effort. And this helps in making that decision.

  4. 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.

  5. Leroy Brown says:

    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.

  6. hmm nice calculator Thanks!

  7. Good calculator Jon, Thanks!

  8. thanks. very handy calculator

  9. 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.

  10. 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.

  11. 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.

  12. 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).

  13. 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.

  14. 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.

  15. 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.

  16. 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.

  17. 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.

  18. wondering says:

    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!!!

  19. 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….

  20. Any feeling about FNBO at 6%.

    Anyone familar with them

  21. Jonathan, do you have any thoughts on Amtrust Direct money market savings account offering 5.36. Thanks Ken

  22. d-train says:

    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.

  23. 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. :)

  24. 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!

  25. Rinkesh Kumar says:

    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.

  26. What about the fact that the interest earned is taxable income?
    Therefore, the true return depends on your tax bracket.

  27. It would be cool if you could adjust the calculator so that you could enter either apr or apy.

  28. This is helpful. I keep large cash in internet accounts but don’t want to rate chase too often. Since you check & update rates on your site a lot, it would be helpful if you let us know which banks have a history of staying in the lead on rates. I was at ING, now HSBC (I have HSBC checking so added incentive) — is it worth moving to Dollar or another one or is that just a promotional rate for them now? What is their history?

  29. Jonathan, I had forgotten about this tool, but it just came in handy almost six years after you originally posted it.

    (Currently assessing how worthwhile it would be to transfer to FNBO for their current promotion, but I’m sure I’ll use it again in the future as well.)

    Thank you again!

  30. It’s hilarious to look back at this six years later, with APRs so low that it practically is irrelevant unless you’re a millionaire. I miss me some 5% APRs.

Trackbacks

  1. [...] 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). [...]

  2. HSBC Raises Rates to 6.00% » Moneymatics.net says:

    [...] 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. [...]

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  10. [...] account? Every single day it takes eats into your small profit margin.  My Money blog has a GREAT calculator showing you the cross over [...]

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  14. [...] 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 [...]

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