It took me forever to join ING Direct. Sure the interest rates were great at the time (definitely not now) but I simply had a customer loyalty towards my local bank. The employees knew me on a first name basis. Some of the employees even went to high school with me. If any issues ever came up, I could walk over to the bank in 5 minutes and have everything resolved.
This is why I decided to keep my brick-and-mortar account even after I joined ING Direct. Some will say that it’s crazy to keep a traditional bank account in 2010. I don’ totally agree with that. This is why I want to show you guys some of the reasons as to why it’s simply not always worth chasing bank rates:
Small Changes in Interest Rates Will Happen
Most of us will learn this the hard way because it seems like the grass is always greener on the other side. Now every time I receive an email from ING Direct, I don’t feel like opening it. Why? Because it’s about reduced interest rates. When I first signed up, they were offering very competitive rates.
In fact, recently when I tried to find the best online bank account I realized that it was really difficult to come to a conclusion. Bank interest rates are simply not impressive at the moment. Especially for those of us that enjoy our low-risk investments.
Many Interest Rates are Introductory
Yes, the classic bait and switch. I’m sure you guys don’t need the rookie investor telling you about this. The more advanced investors reading this can surely attest to the merits of zero percent balance transfers and chasing interest rates. For the new investor, introductory rates are simply not worth switching banks for.
You May Already Have a Trusted Bank Rep or Financial Advisor
I’ve heard horror stories from some of my readers when it comes to finding a trustworthy financial planner. Then there are those that find a successful financial advisor and have nothing but rave reviews about their experiences. I wouldn’t recommend that you ditch a relationship you have built with your financial advisor/local bank associate for 5+ years just for a few extra dollars a month.
Don’t you Have Better Things to do With Your Time Than Chase Interest Rates?
Evan recently wrote about his introduction to dividend investing. Adam Baker of Man vs Debt just released his new eBook: Unautomate Your Finances. Brian of My Next Buck started his new job this week. My question for you guys is this:
Is there anything else that you can do to increase your income, aside from chasing bank rates?
Do you guys have any positive stories to share about chasing bank rates?
Or perhaps you chased bank rates and had a negative experience? Please do share with us.