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What Does It Mean to Leave Money in Bad Accounts?

a couple moves money around to avoid bad accounts

A new year is here, which often means it’s time to take a look at last year’s financial situation in order to create a new budget or prepare for tax season. But what if you check your account statement only to find you earned almost no interest on your money last year? Or what if you discover that your checking account is giving nothing more than the bare minimum?

There’s a chance that you’re leaving too much money in "bad" accounts.

Keep reading to learn more about bad accounts, alternatives, and how to find the right accounts to meet your financial goals.

What Is a “Bad” Account?

First of all, what is a “bad” account? The truth is that there’s really no such thing as a “bad” account -- as long as it’s FDIC-insured and helps you keep your money safe. But depending on your financial goals, there are certainly some types of accounts that can help you meet those goals better than other accounts .

Let’s look at two common types of goals: growing your investments and getting the most from your checking account.

First, if your goal is growing your investments, some types of savings or checking accounts may not help you do anything more than keep your current money safe. In other words, you likely won’t be earning any interest on the money in that account.

The reason you aren’t getting the benefit of increasing your balances is because the typical interest rates on these types of accounts are currently low, according to data from the FDIC. It comes down to the fact that  your money isn’t able to earn much interest or grow your investment.

Now, if your goal is getting the most from your checking account, a checking account that doesn’t offer any rewards wouldn’t be the right type of account for you.

Alternatives To Consider

No matter your goals, the best types of accounts for you are the ones that will help you reach those goals.

If you’re looking to grow your investments, money market accounts and certificates of deposit (CDs) typically offer higher interest rates than traditional savings accounts.

And if you’re looking for a checking account gives you more than just the bare minimum, the Armed Forces Bank Access Rewards Checking Account offers up a big serving of rewards when you bank, shop, and play.

About Money Market Accounts

Money market accounts are a type of savings account that can help you grow your investments. It can help to think of money market accounts as a combination between traditional savings accounts and checking accounts. For some people, money market accounts are the best option because they provide the best of both worlds. And they can help your money grow more than a traditional savings account can.

Like savings accounts, money market accounts can earn interest. But a main benefit of money market accounts is that they typically offer higher interest than traditional savings accounts. Just keep in mind that money market accounts often have higher balance requirements in order to earn that higher rate. Minimum balances are usually $1,000 or more.

As of January 2023, Armed Forces Bank currently offers a promotional six-month money market account with a 2.53% Annual Percentage Yield with a minimum balance of $10,000, which can help you power up your savings to start the year.

Open a money market account today or learn more.

About Certificates of Deposit (CDs)

A certificate of deposit, or CD, is another type of account that can help you earn more interest than a traditional savings account can. Basically, CDs hold a fixed amount of money for a fixed length of time -- you’re essentially setting that money aside until a later date. But you’re doing so with the promise of receiving a certain interest rate in return.

While the length of time you leave your money in a CD varies, the longer you leave your money in the account, the more interest you’ll be able to earn. When you commit to leave your money in the CD for a specific period of time, you’re allowing the bank the option to borrow your money during that time. So, you get higher interest rates, but you also have restricted access to your money.

A CD could be a “good” account for you if you want to earn some interest on your savings in a low-risk way. But they’re best when you don’t need immediate access to those funds, since they’ll be tied up until the maturity date.

Right now, Armed Forces offers high-yielding CDs that can help steadily grow your money: With only a $500 minimum deposit, you can take advantage of a high yielding 13-month CD at 4.16% Annual Percentage Yield (APY) or a high-yielding 24-month CD at 4.58% APY.

Open your Armed Forces Bank CD account today or learn more.

About Rewards Checking Accounts

A checking account is a type of account that many of us use almost every day. But a checking account that gives you the bare minimum could be a “bad” account for you when there are alternatives that give you a whole lot more.

The Armed Forces Bank Access Rewards Checking Account** helps you protect your identity, your purchases, and your phone. Plus, it offers you the ability to enjoy big savings when you bank, shop and play.

Here’s just a sampling of what you can get with Armed Forces Bank Access Rewards Checking:

  • Get paid one day early with Early Pay
  • Unlimited, free access to 30,000+ ATMs nationwide with MoneyPass Network - easily find an ATM near on the MoneyPass site
  • Online Banking with Bill Pay
  • Mobile Banking with Check Deposit
  • Visa Debit Card & Controls
  • No Fee Money Orders & Cashier’s Checks
  • Complimentary Standard Checks
  • Free e.Statements
  • Saving Cents Eligibility - round up your debit card purchases automatically and put the change in your savings

Now, why would you want to settle for a checking account that offers you anything less?

Open your account today or learn more.

Let’s Work Toward Your Financial Goals, Together

No matter your financial goals, Armed Forces Bank is here to help you achieve them. We’re proud to offer our clients our Premier Money Market Account, CD Accounts, and Access Rewards Checking Account, bringing you the value you deserve.

Member FDIC

** Benefits are available to personal checking accounts and their primary account owner and joint account owner(s) subject to the terms and conditions set forth in the Guide to Benefit and/or insurance documents for the applicable Benefits.  Some Benefits require authentication, registration and/or activation.  Benefits are not available to the "signer" on the account who is not an account owner or to the businesses, clubs, trusts, organizations and/or churches and their members, or schools and their employee/students.

Direct deposit required.  Maximum ACH credit is $15,000.00.

No fees for withdrawals, transfers, balance inquiries or denied ATM transactions at ATMs in the MoneyPass® Network if you have a MoneyPass® logo on the back of your card. MoneyPass® Network ATMs are within the U.S. only.

Message and data rates charged by your mobile phone carrier may apply.

Deposits are subject to verification and not available for immediate withdrawal. Deposit limits and restrictions apply.

Free e.Statements or $5 paper statements for Access Rewards.