Are You a Rate Chaser?

Though I have multiple online savings accounts and often move money around to get the best deal, I don’t consider myself a real rate chaser. Rate chasers, according to the definition in a NY Times article, are savers

who hunt for the best interest rates at banks and credit unions and quickly move their cash from one account to another.

I want to get the most out of my money, but I didn’t go after each and every bank that pays the highest rate. I only open an account when the promotion rate is significantly higher and the promotion period is meaningfully long. In addition, in order to make a profit, I will need a substantial amount of money at hand to play the game. These are the reasons I opened an account at FNBO Direct early this year when they offered a 6.00% APY promotional rate for six months. With nearly $100,000 deposit, all borrowed from credit cards with 0% APR offers, I was able to collect about $500 a month in interests. At the end of September when the promotion ended, I have earned more than $1,600 from FNBO alone. What could be better than making money from money borrowed for free? Right now, I have my money at IGoBanking which pays 5.17% APY (check out the complete list of online bank offers). Though there are CDs out there with higher rates, I like the flexibility of an online savings account.

The reason for rate chasing is of course for preserving and growing the money. While in the long term the stock market is the place to be, a high-yield savings account is a sure way to grow your hard earned money in the short term, whether it’s for a house downpayment, purchasing a new car, or a vacation. And it turns out that rate chasers’ return isn’t bad at all compared to the total return of the stock market measured by the S&P 500 index.


The NYT article, Rate Chasers Are Online and Moving Cash Quickly, has this part as a rate chaser’s logic for chasing the rates:

“The millionaires have stocks and bonds, and they’re chasing with their safety money,”? said Nick Ferris, a 24-year-old software engineer from Rockville, Md., who readily acknowledges that he is one of the more aggressive rate chasers, having borrowed money at 0 percent introductory rates from six credit cards. “We poorer people who don’t want to go bankrupt if the stock market crashes are more inclined to go rate chasing with all of our money because all of it is our safety money.”?

Are you a rate chaser?

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9 Responses to “Are You a Rate Chaser?”

  1. RV |  Oct 17, 2007 at 11:34 am


    I don’t consider myself a rate chaser. Reading your article gave me an idea to implement, but how good of an idea is it.

    I have no debts and 6 months of Emergency Funds. Would it be wise to borrow money from sources like a credit card at 0% and deposit them into a high yield savings account?

    I would greatly appreciate if you could give your opinion on it.


  2. lulu |  Oct 17, 2007 at 1:01 pm

    I thought I might be a rate chaser after I got PayPal money market and then opened ING. But I realized I did not have the energy to do this all the time. I kept my PayPal account even after opening ING because sometimes it is more convenient.

    Even when ING dropped its rates I kept the account open because it has many features I love.

    I also opened a savings account with Emigrant direct at the time they had a good rates deal but I only use the account for savings.
    So in summary, I am a rate watcher, not a rate chaser.

  3. Money Blue Book |  Oct 17, 2007 at 3:45 pm

    Sun, don’t you hate these spam trackbacks that are popping up now..ugh :(

    Anyways, I’m a hardcore rate and returns chaser. I invest my cash and stocks like I play fantasy football. If you don’t produce at maximum capacity, you are no good to me. I do invest for the long haul, but if I don’t see maximum long term growth, I switch investment vehicle.

  4. zeron |  Oct 17, 2007 at 5:32 pm

    if it works and fits your investing style then you should be fine.

  5. Clever Dude |  Oct 17, 2007 at 8:48 pm

    Not sure if you know, but that guy named Nick in the article…It’s Nick from Punny Money ( That’s him in the picture too.

    Stupid writer interviewed me for an hour, but didn’t find room in the article for me :(

  6. Sun |  Oct 18, 2007 at 12:28 am

    I used to transfer money out of Paypal immediately when it’s available, but now I am keep it in Paypal as the rate isn’t that bad. As of ING, the account is almost empty for a long time. There’s no reason to use it when their rate is almost the lowest among major online banks.

    Money Blue Book: Just curious, how do you see maximum long term growth? I think rate chasers are only looking for short term returns.

  7. Amr |  Oct 18, 2007 at 4:24 am

    thanks alot
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  8. Armchair Fiduciary |  Oct 21, 2007 at 11:58 pm


    I think am a quasi-rate chaser. I have opened 3 different money market accounts in the last 18 months. I try to find banks that have consistently high rates and then switch between them. I think Countrywide, ING, Emigrant, and a couple others are worthy of having accounts with because one of them is always trying to grow their money market deposit base. I don’t have the time to open a new account every month though.

  9. Cheapiness |  Nov 30, 2008 at 6:56 pm

    Great article on Rate Chasers. I linked to your post on my blog!