Is it worth switch money to a new account?

bparkhur · December 2013

We currently keep our house down payment fund (currently 32,000) at capital one 360 where the interest rate is .75. Would it be worth moving the money to Barclay's where the interest rate is .90?

Originally we thought we might buy a house this spring/summer, but now we are considering putting it off for another year until next spring summer. If the right house in the right neighborhood became available, we might go forward with a purchase this year still (the housing market has already rebounded here in South Florida and we're afraid of interest rates going up). Ideally, I'd like to save more money before purchasing, but inventory is low and interest rates are rising.

CuriousKiddosMama · December 2013

Is it still as accessible to you if you move it? If so I guess I would. Either way you are going to have a crappy interest rate since this is something you can't/don't want to invest for the long haul, but .9 is better than .75 or whatever. It may only amount to a couple of dollars over the months or year or whatever, but it still may be worth it if you can get your money out instantly when you need it.

hoffse · December 2013

I wouldn't, but that's because I've read the Barclays rate is probably a teaser rate. A lot of folks seem to think that as soon as they have enough US accounts open the interest rates are going to drop like crazy. Who knows when that will be.

Barclays is a UK bank, and they just opened for business in the US recently.

hoffse · December 2013

And the interest rate thing on houses is entirely relative. 7-9% is historically a pretty good interest rate. We're years away from that. Typically during periods of extremely low interest rates like we're in now, raising the interest rates tends to suppress house prices until everybody is used to feeling like 5% or 6% or whatever is a decent rate again. That takes some time.

My point is I wouldn't pull the trigger early just because of interest rates. A lot of people bought over the summer because rates went up a tiny bit - but then they dropped again in the fall.

sillygoosegirl · December 2013

I wouldn't for the rate difference. Which bank has the best rate varies because some banks periodically have intro/teaser rates. Doesn't seem worth it to me when who has the best rate will continue to change.

However, I might switch if you aren't happy with the service or feature set you are getting now. Actually, I'm in the process of switching now because I'm frustrated at how my bank handles sub accounts and periodic transfers.

Xstatic3333 · December 2013

I wouldn't switch for that interest rate, teaser or no. You could check local credit unions though-my savings with my credit union gives 4% on your first $3000, basically amounting to ten free dollars a month.

jtmh2012 · December 2013

I had a CapitalOne account and switched to Barclay's for the same reason. The rate isn't a teaser rate. It has varied slightly just like any other interest rate, but it isn't a teaser. I've been with them about two years now. I currently have 4 long term savings accounts with them.

emily1004 · December 2013

It's really up to you. We switched from HSBC when their interest rate just kept going down. We also have been with Barclay for nearly two years and the interest rate has kept steady. The website is very user friendly.

hoffse · December 2013

Maybe that isn't a teaser - I hope not. I was looking at doing something with them but would rather wait a couple more years until I do.

They aren't mainstream yet in the US, and the higher interest rates are typically to attract capital. Once the capital has been established than interest rates drop. Usually. Not always. Barclays is so big that I would be really surprised if they kept it up for the long term. They are kind of like the Wells Fargo of the UK - and we all know Wells Fargo doesn't offer interest rates like that simply because they don't need to. Folks will bank with them anyway. That said, it is a good rate now, and jthm has confirmed it's been a good rate for awhile. So if you're dissatisfied with your current bank, OP, then maybe it makes sense to switch.

bparkhur · December 2013

Thanks for the input everyone! I'm not dissatisfied with capital one at all; quite the contrary, actually. Like many people, I'm just looking for the most bang for my buck. I was try to decide if it would be worth going through the hassle of setting up a new account, changing direct deposit, etc when I might just be taking all the money out in the not so distant future. Probably the hassle isn't worth it.

MommyLiberty5013 · December 2013

hhhmmmm If Barclays is a foreign bank operating in the US is it still subject to the FDIC????

Also, are there fees at your current bank to leave and close the account? Or, would opening the same account at this bank in the future be difficult?

As a banker pre-SAHMhood, I would stay put. Moving money around just for a rate chase is a PITB.

hoffse · December 2013

Yes, it's still subject to the FDIC. There are a lot of foreign banks that do business here (ie: BBVA Compass, Iberiabank, etc.) but Barclays is just newer to the American market than some of the others.

Is it worth switch money to a new account?

Re: Is it worth switch money to a new account?

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