Gary Zimmerman, founder and CEO of Max My Interest, joined Cheddar News to discuss how you can move your money from big banks to higher-yielding savings accounts. 

Gary Zimmerman, founder and CEO of MaxMyInterest, joined Cheddar News to discuss how you can move your money from big banks to higher-yielding savings accounts.&nbsp;

Getting the Most Bang For Your Buck from Your Bank

if your savings account is at a major consumer bank you might be missing out on a lot of cheddar. That's because these banks pay a very low interest. Despite the Fed raising its rates now to the highest level that we've seen since 2008. Well in fact an analysis by S. And P. Showing americans could have earned $42 billion more in interest in the third quarter if they moved their money from a big bank to a top high yield savings account. So joining me now is Gary Zimmerman founder and Ceo max my interest in automated cash management system. Gary, it's great to have you on the show. Help us put things into perspective here. How much on average are savers losing by not moving their funds into a high yield savings account? Well Kristin thank you for having me. Um The the savings opportunity is really tremendous. Um You know a typical household is keeping their money in a regular brick and mortar bank. And according to the F. D. I. C. The national Savings average there is 0.24%. That's less than a quarter of a point. By contrast. The highest deal available on the maximum interest platform today is 4.11%. So that's nearly 4% points higher yield for exactly the same product. An F. D. I. C. Insurance savings account. So if you think about someone, let's say with $100,000 of cash saved away they could be earning an extra $4000 a year of incremental interest, wow. So unlike crypto where your money can go to zero and it's not F. D. I. C. Insured Gary as we've all learned throughout the course of the past year. So this money is protected by the federal government in one of these high yield savings accounts and 4.11% is pretty good. Even when you look at yields on some of these bonds and bond funds out there. What are the top banks or the top high yield savings accounts that people should be aware of? Well the good news is you don't really have to pick one bank right? The rates change all the time and this is really how maximum interest began. Um I was holding cash during the financial crisis and I found that I could keep my cash safer by spreading it out across multiple banks. But those banks were changing their interest rates all the time. And so we built the maximum interest platform so that you could actively manage your cash and make sure it was always sitting in the highest yield account. So on the screen you've listed a couple of high yielding banks. The highest yielding banks on our platform today are you F. B. Direct which is paying 4.11% as well as brio Direct which is part of Webster bank and customers bank. And there are a number of other banks we support as well but the whole idea is that you don't have to pick one bank will help you make sure your cash is always in whichever bank pays the highest yield. So technically how does that work area? And how do consumers ensure that by using max my interest, their money is protected? Well the nice thing about max and how we designed it coming out of the financial crisis is that we never touch any money. So your money always stays safe and sound directly held by you in your own bank accounts. So max is really just a communications layer. And what we do is we help you figure out how to optimally allocate your cash across your accounts and then based on your instructions, we just pass along your transfer instructions to your banks and your banks then move the money between your own bank account. So we never come into contact with money. Are there fees associated with moving the money around? There are no fees associated with moving the money around max does charge a nominal fee for the service, but that way, you know who the customer is, you're the customer. Okay, so of course it's a good time to save. That's for sure. With a potential recession on the horizon, why is it important for americans to grow their savings especially now? Well, it's interesting, I mean everyone thinks about cash differently, but one of the interesting uh sort of stats out there is that the average high net worth household actually keeps close to a quarter of their liquid assets in cash, which is much higher than most financial advisors think. Um And so what we've done is built a platform that enables advisors to really bring all of that cash into view so they can have more holistic discussions with their clients about what is the right cash allocation and for each person is different in general. The most advisers recommend that you keep at least six months worth of living expenses on hand and cash if you can. And that way you're protected in the event of job loss or some other, you know, disruption to life such as the pandemic that we just lived through. That's right. Well given that a recession might be on the horizon. Gary, even though the jobs market is relatively strong and perhaps you do work at one of these high growth tech companies, does that sort of six month emergency fund change at all. Would you recommend perhaps in these times that people do try to devote more money to a high yield savings account or via your option max my interest in case they do see a lay off down the road. Well, you know, it's really a personal decision, so we try not to provide financial advice. Everyone has a different risk tolerance, but there is a really interesting study out of the U. K. That shows that money doesn't buy happiness, but the larger percentage of your assets that you're holding cash, the happier you are. And we think it's because it helps people sleep a little more soundly at night. They don't feel trapped in their current job. That just having that extra cash cushion makes them just feel that they've got more flexibility and maybe that that adds a little richness to life. That makes a lot of sense. Gary Zimmerman, founder and Ceo of MAx my interest. Gary, thanks so much.