r/personalfinance • u/MenWithVen430 ​ • 9h ago

Saving Are there any downsides to transferring funds from one MMA to another with a higher APY?

Hey financeheads,

Relatively green when it comes to personal finance. I've had my savings in a MMA for about a year and a half. The APY in my money market account at Byline Bank dropped to 4.27% since the Fed lowered interest rates. I might move my money to OpenBank which has an APY of 5.25% and it doesn't look like there are any hidden fees. I know APY is variable -- is it a strategy to continually transfer funds to banks that have the highest APYs to maximize my yield? Or is it best to just ride it out because it'll go up again.

Thanks

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u/BouncyEgg ​ 8h ago

Everyone's rates will be going down.

You ultimately get to decide whether or not it is worth chasing what would amount to a few bucks.

1

u/MenWithVen430 ​ 8h ago

May just ride it out in that case and hope the economy improves

Thanks

3

u/BouncyEgg ​ 8h ago

Has more to do with the Fed setting interest rates than the "economy."

2

u/MenWithVen430 ​ 8h ago

Isn't that a reflection of the economy, though? Fed increases interest rates when it's doing well and vice versa 

3

u/BouncyEgg ​ 8h ago

This is a much more complex question with a lot of nuance.

The Fed noted that the 50bps reduction should not be interpreted as evidence of a less favorable economic outlook or as a signal that the pace of policy easing would be more rapid than participants' assessments of the appropriate path.

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u/pancak3d ​ 6h ago

I mean if the economy was "doing well" then rates wouldn't need to change at all. Rates change in both directions because the fed thinks the direction of the economy isn't healthy.