Banks that dont offer great APYs?

So im just now learning about APYs and such things. Now im very ignorant on these subjects so I really would like to know why do the "top" banks such as BoA, Chase, WellsFargo, have such APY rates but the smaller banks like citi bank have great APYs and why does it seem like more people go with the top banks when it seems obvious the smaller ones give you more bang for your buck?

2 Answers

  • danxp2
    Lv 6
    2 months ago

    Nost people do not have the time, energy, or interest to shop their banks every quarter or year. They get set up where their parents were, or wherever can take them when they get their first direct deposit checks, car loan, home loan, etc. and sit there unless something drastic happens. 

    Those who do have the time and energy know banks aren't where you are going to earn money. You go to a brokerage company to invest and only bother to park in a bank for a CD or an emergency fund you aren't expecting to earn interest. You are expecting it to sit there and be there when you need it, or to get a loan, and having money at the bigger bank can give them favorable loan rates if they have other assets there. As to why smaller banks offer better rates, they are hoping that better rate will be the drastic thing that gets someone to change. 

    There are a whole lot of other reasons people decide to do what with their money.

  • 2 months ago

    Citi is not a small bank, It's the 4th largest bank in the USA and one of the largest banks in the world.

    Chase is the largest bank in the USA.  Basic savings account interest is .01%

    Citibank's basic savings account interest rate is .04%.

    Do you know what this means?

    If you put $100 in a bank account, at the end of one year you will have:

    Chase = $100.0008

    Citi = $100.0033

    If you are lucky they might both give you an entire penny.

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