Is Your Bank Exploiting Your Laziness?

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In today's economic landscape, the question that needs to be asked is: are you getting the most out of your savings? 

The reality may surprise you. The current average interest rate paid by banks on savings deposits is a paltry 0.41% as of February 2025.  This is a shockingly low return for your hard-earned money. And while it might seem convenient to leave your savings in your bank account, this convenience could be costing you.

In contrast, Treasury bonds and brokered CDs can yield more than 4.0%, risk free, when held to maturity.  Corporate Bonds, High Yield Bonds and Private Credit can earn far more.

U.S. Treasuries are government-backed securities that are considered one of the safest investment options available.

Similarly, brokered CDs are a type of time deposit offered by banks with fixed interest rates significantly higher than regular savings accounts. They are called "brokered" CDs because they are bought and sold through brokerage firms. Brokered CDs offer a wide range of terms and, in many cases, provide higher interest rates than traditional bank-offered CDs.

The stark difference between these rates and what the average consumer earns on their savings account can only be explained by one thing: banks are capitalizing on consumer inertia. 

So, why are you receiving a meager 0.41% from your bank when you could be earning 4.0% or more? 

The answer lies in one word: convenience. 

Most people stick with their bank because it's easy. They set up a savings account, deposit their money, and then forget about it. Banks take advantage of this "out of sight, out of mind" mentality and the general lack of awareness about other high-yielding, risk-free options.

If you have $100k in one or more savings accounts, that could be costing you more than $4,000 per year in lost interest.

Even if your money is in a high-yield money market account, Treasuries and Brokered CDs may offer higher rates and several other advantages, including:

• The ability to lock in rates for longer periods than money market rates which change daily.
• Money-market funds are not insured while U.S. Treasuries are backed by the full faith of the U.S. Government. Brokered CDs are also insured by the U.S. Government (up to certain limits).
• U.S. Treasuries are exempt from state and local income taxes.

At ESG Wealth Advisors, we believe that every cent of your savings should be working as hard as you do. That's why we're dedicated to helping our clients maximize their returns, taking advantage of the highest yielding, low-risk investments available for their cash. 

It's time to stop letting your bank exploit you. With the right advice and a proactive approach to your finances, your savings could be working much harder for you.