Here at BestCashCow, we’ve always been big proponents of earning the highest possible interest on your cash accounts (savings, CDs, checking). We are also big proponents of maximizing your credit card travel rewards by using the most valuable cards for your spend.(hyperlink /credit-cards)

We’ve noted as recently as yesterday that Chase is simply not competitive with the leading online banks when it offers 0.01% interest. It is remarkable that some customers continue to deposit large sums with Chase at that rate. It simply makes no sense.

Those who follow our credit card section know that we also value Chase’s Ultimate Rewards points – earned through the Sapphire Reserve Card and the Sapphire Preferred card – at around 2.05 cents. While Chase enables Reserve cardholders to redeem these Ultimate Rewards points directly for travel credits at 1.50 cents per point on its travel portal (and Preferred cardholders at 1.25), we think that they are worth much more than that when transferred to, and redeemed through, a partner like Hyatt, United or Singapore Airlines.

60,000 Chase Ultimate Rewards points transferred to Hyatt, for example, will get you 2 nights at the Park Hyatt Vendome in Paris or the Park Hyatt in New York (50,000 will get you two nights at the Churchill in London). Redeemed in this way, the 60,000 points achieve more than 2.05 cents in value and dramatically more than $468.25.

Where is the $468.25 number coming from? $468.25 is the interest you are going to earn on $75,000 if you were to deposit it in an online bank over the next 3 months at 2.50% (the highest online rate currently available). But, if you use that money to try out Chase’s Sapphire Banking over the next three months, they will give you the 60,000 Sapphire Points. We think that makes good sense. In fact, it makes sense even if the $75,000 is sitting idly in Chase for the next three months.

You can sign up for Chase’s Sapphire Banking directly on Chase’s website, but to receive the 60,000 points you need to be a current holder in good standing of either the Sapphire Reserve or Sapphire Preferred cards. It is also possible that, unlike with the sign-up bonuses for those cards, you will receive a 1099 for the 60,000 Ultimate Rewards points, as in this case the points are an interest alternative and not necessarily tax free as they have been ruled as a reward for credit card spend. But, even if you receive a 1099, the value is still there (the $468.25 that you are foregoing would also be fully taxable on a 1099).

This marks the first time since 2013 when it has made any sense for depositors to consider something other than cash interest for their savings.

Check online savings rates here.

One of the most amazing things over the last years has been the huge difference between interest that could be earned from savings and CDs in online banks as compared with that earned at the major brick-and-mortar banks (Chase, Bank of America, Wells Fargo and Citibank to name a few). Equally amazing has been the fact that few in the mainstream media have noted this difference. Still more incredible, until recently, even the online banks have been somewhat reluctant to aggressively highlight the fact that the major money center banks are still giving the public 0.01% or 0.06%.

Online sites, such as BestCashCow and RatesAndInfo.com, have, of course, religiously listed the online banking rates, but even they have been relatively unable to generate much excitement about earning larger returns on your cash in online banks as other assets (equities) have appreciated much more quickly. (These sites also cover brick-and-mortar rates and since some of the smaller banks are competitive, there is a hesitancy to paint all brick-and-mortar banks with the same brush).

But, even as rates are rising, some people are simply unwilling to make the effort to move their money away for the major money center banks. The most amazing thing about all this is that the far better income earned online is absolutely as safe and as protected by FDIC insurance as interest at brick-and-mortar places. There is, in other words, absolutely no reason whatsoever, for one to park cash in anything other than the online highest paying banks.

Finally, the online banks, themselves, have realized their incredible competitive advantage and are just beginning to shout about it from the rooftops.

As an example, this morning wrapped around my copy of the New York Times, delivered to my doorstep, was a huge (2x1 foot), slick advertisement by a major online bank announcing:

THE BIGGEST BANK HEIST IN HISTORY IS TAKING PLACE RIGHT UNDER

YOUR NOSE. IT’S PAYBACK TIME.

BANKS HAVE BEEN KEEPING BILLIONS OF DOLLARS OF YOUR INTEREST.

MOVE YOUR MONEY TO AN ONLINE SAVINGS ACCOUNT AND START

GETTING THE INTEREST YOU DESERVE.

So, it’s about time. It’s actually a wake up call to all of us that old habits can make us loose big money.

See the best online rates here. Compare these rates with the local brick-and-mortar rates where you live here.

Having been running BestCashCow for many years now, this is the most common question that I receive. The question comes from people I know well and people I know casually and people who I don’t know at all. It comes fast and furious when rates are rising (as they are now) and when the stock market corrects (which it may also be doing now).

This is a question that I do not like to answer in the affirmative. Anyone who was awake and conscious in 2009 knows that banks can fail hard and quickly. With the benefit of hindsight, I believe that there will not be another systematic failure of the banking system in our lifetimes, but that another failure like Lehman Brothers could easily happen again. If we have retained nothing else after 10 years we should remember to always expect the unexpected.

And, when you do that, you realize that the risk in going over FDIC (or NCUA limits) for most people will outstrip the rewards. Quite simply, there are now many, many competitive online banks with competitive savings rates. If you consider short-term CDs, you will find more online banks that work for you. And, by adding local banks and credit unions, you will find even more. Since it takes only five minutes to open these accounts, the answer that I give to most people is to open another account rather than put your assets at risk. The risk to get an extra couple of hundred dollars at a higher interest rate simply isn’t worth it.

As a general rule of thumb, I believe you can find at least 12 accounts to open. If you cannot find 12, then you should go back and look again and open more accounts.

Here is BestCashCow’s list of the best savings rates.

Here is BestCashCow’s list of the best one-year CD rates.

Therefore, if you have under $3 million as an individual assigned to cash and CDs (or $6 million as a couple), this really is not a question you should be asking me or anyone else.

I recognize that many of the site’s users have more than that amount, or have particular reasons for wanting to be more concentrated (primarily estate planning issues). For these users, BestCashCow has significant resources which you can use to judge the viability of any bank, credit union or online bank.

It is also for these users that we highlight programs, such as Massachusetts’ DIF, that may provide addition insurance above FDIC limits. Ultra high net worth depositors may also want to consider CDARS.

However, for the majority of people, the answer to the question is definitively “no”.