Keeping your money in a typical bank savings account could be costing you hundreds of dollars a year

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Switching to a high-yield savings account could earn you thousands of dollars depending on your account balance.

• The worst savings accounts in the US pay just 0.01% interest, which is far below the average 0.09% nationwide.
• Online banks pay as much as 2% interest, with many popular banks paying over 1.5%.
• Switching banks for your savings could earn you thousands of dollars depending on your account balance and how long you keep your money in the bank.
• Read more personal finance coverage.

The average savings account in the US pays an unimpressive 0.09%, and some of the biggest banks in the US pay just 0.01% interest. Online banks, however, pay as much as around 2%. That is 200 times more in some cases!

What does it cost you to bring home just 0.01% interest compared to 2%? Let's take a look at what you lose with a low-yield savings account from a typical brick-and-mortar bank.

Typical savings rates at US banks

According to the FDIC, the average bank pays 0.09% interest for savings. But there is a very wide range, and you could find yourself earning more or less depending on what bank you trust with your money.

If you use a traditional brick-and-mortar bank, your bank has to pay for a building, staff, utilities, and landscaping so you have a nice place to go when you want to manage your money. But those things are expensive.

The biggest banks give you very low interest rates and charge higher fees to make up for it, and pad their profits. That's why the banks with the biggest footprint of branches offer just 0.01% interest. That's just terrible.

You can earn more with high-yield savings

While a few online accounts top 2% right now, I'm not a big fan of bank hopping for just a small difference. But when you can earn 100 to 200 times more by switching once, it is worth the time and hassle.

I have high-yield savings accounts that pay well over 1.5% as of this writing at Ally Bank, Capital One Bank, Simple, and SoFi. While rates have been trending downward with interest rates set by the Federal Reserve, online banks tend to pay a heck of a lot more than old-school banks.

The cost of a low-yield account versus high-yield savings

If you have a $10,000 emergency fund, you should keep it in a high-yield savings account that pays a top interest rate. Here's a look at what you could earn there versus a big, traditional bank.

At 0.01% interest, you would make just $1 in interest on your $10,000 balance in the first year. After five years, you would wind up with a total of $10,005; 20 years would leave you with $10,020.02. In 20 years, you've earned just over $20 in interest on $10,000.

Now, let's compare that to an account paying 1.6% interest, which is well above the average but still a ways from the very top. At that rate, you would have $10,161.18 after one year. That's more than eight times the interest you would earn in 20 years at 0.01%.

After five years, you would have $10,832.29. In 10 years, you would have a total of $11,733.86. After 20 years, you would have $13,768.34. That's thousands of dollars in earnings compared to about $20 at 0.01%.

Take action to make the most of your money

One percent might not sound like much, but over the course of years, this difference in interest rates can be worth thousands of dollars in your pocket.

Many people are too lazy to make a change or don't know how much they are missing out on. Now you do. Don't let your money sit idle in a bad account. Get the best interest rates out there and bring home the cash you deserve by opening a high-yield savings account.

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Personal Finance Insider offers tools and calculators to help you make smart decisions with your money. We do not give investment advice or encourage you to buy or sell stocks or other financial products. What you decide to do with your money is up to you. If you take action based on one of the recommendations listed in the calculator, we get a small share of the revenue from our commerce partners.

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