Wells Fargo is a major bank with 6,000 physical branch locations and 13,000 ATMs. It acquired Wachovia for $15 billion dollars in 2008 and now serves 70 million customers globally. You’ve probably seen Wells Fargo make headlines recently for news that’s a little less pleasant than the huge acquisition.
In 2016, Wells Fargo accepted responsibility for employing sales associates and managers who were opening fake debit and credit card accounts under customer names without their consent to meet sales goals.
Wells Fargo was fined $185 million dollars for the account fraud. The bank refunded $5 million dollars to customers affected and terminated 5,300 employees tied to the misconduct. Wells Fargo announced the removal of sales goals at retail branches to dial back on the aggressive sales culture that led to fraud. And executives went on an apology tour at the end of 2016 to restore consumer faith.
Despite the scandal, Wells Fargo is still one of the largest U.S. banks and offers many products, from savings accounts to mortgage and education loans.
In this post, we’re going to dive into the Wells Fargo Way2Save Savings account to review the terms and how this account could fit into your savings strategy.
Wells Fargo Way2Save Savings Account Basics
The Wells Fargo Way2Save Savings account has the traditional fees and terms that you can expect from a brick-and-mortar bank. There’s a monthly fee if you don’t follow certain rules and a minimum balance required to open the account.
Here’s an overview of the account fees and terms:
- Minimum deposit required to open an account – $25
- Annual percentage yield (APY) – 0.01%
- Monthly fee of $5, unless:
- You maintain a $300 daily balance, or
- You set up and maintain monthly automatic deposits of $25 or more into the account
- You are under the age of 18 or 19 in Alabama
Wells Fargo Way2Save Savings Account Tools
Extra features of the Wells Fargo Way2Save Savings account include tools that encourage you to save more money.
If you sign up for the Save As You Go transfer tool, Wells Fargo will move $1 from your checking account to your savings account every time you:
- Pay bills through Wells Fargo Bill Pay
- Make a debit card purchase
- Make automatic payments from the connected checking account
Let’s say you make 20 qualifying transactions a month. In this scenario, $240 per year will be transferred into your savings account automatically. That can add up.
You can also set up monthly or daily transfers from a linked checking account to your savings account. If you set up monthly transfers, the minimum you can transfer each month is $25.
If you do daily transfers, you have to transfer at least $1.
How to Apply for the Way2Save Savings Account
To apply for a Wells Fargo savings account, you’ll need your:
- Social Security number
- Valid ID (driver’s license, state ID, or Matricula card)
- $25 to deposit (If you already have a Wells Fargo account, you can transfer $25 from it; you can also use a debit or credit card, or check for this deposit.)
Filling out the application gives Wells Fargo permission to pull your credit history. Your application can be denied if you have negative history from other bank accounts like unpaid overdraft fees.
A Comparison of Fees and APY Against Our Top Choice for Savings
The APY offered by Wells Fargo for the Way2Save Savings account is nothing to write home about.
Wells Fargo offers the Way2Save Savings account with just 0.01% APY when other online-only and credit union savings accounts offer as much as 1.05% APY.
We have a roundup of the best savings accounts that we update regularly here for you to check out.
As for fees and account terms, there are also several savings accounts in the roundup we mention above that have the Way2Save Savings account beat.
Wells Fargo charges $5 per month in the event that you can’t maintain the minimum $300 daily balance and you don’t have enough money to set up $25 monthly automatic transfers from checking to savings.
Let’s be real here, life happens, and there may be a situation where you’re in a financial pinch and can’t meet these conditions.
In comparison, the High Yield Savings account from Synchrony is currently our top recommendation and doesn’t have the same fine print. The Synchrony High Yield Savings account offers 1.05% APY with no minimum account balance required and no monthly fees.
APY of the Way2Save Savings account from Wells Fargo vs. High Yield Savings from Synchrony
Both accounts compound interest daily and pay out monthly.
If you keep $1,000 in a Wells Fargo account for 12 months at 0.01% APY, you’ll earn just $2 in interest for the year. Barely enough for a coffee.
If you put $1,000 in the Synchrony High Yield Savings account for a year at 1.05% APY, you’ll earn about $21 in interest. That’s a few mornings worth of Dunkin’ Donuts coffee.
Of course, this is savings you shouldn’t be using for a caffeine fix, but you get the idea. When your money is sitting in a savings account, it should be earning you as much money as possible.
Downside of Having Savings Connected to Checking
Wells Fargo touts the ease of connecting your Wells Fargo checking account to a savings account as one of the Way2Save Savings account benefits, but that’s not always ideal.
Keeping all of your cash in accounts that are connected to each other may cause you to rely on savings more often than you should. If you’re already a Wells Fargo checking account customer, keeping a Way2Save Savings account for emergencies in addition to an online-only account could be a good savings strategy.
In fact, it’s the strategy that I use as a Wells Fargo customer. I put money that I may need more urgently into the Wells Fargo savings account. The rest I put in a savings account that’s harder to reach. It can be easier to resist temptation and grow savings when money isn’t sitting pretty in an account you have access to instantly.
Should You Open a CD Instead?
To answer this question, CDs can be a good choice. A CD with Wells Fargo — not so much.
A certificate of deposit is an account that you put money into for a certain term, and the money earns interest. During the CD term, you’re not able to deposit any money into the account. You can get charged a fee if you withdraw money before the CD matures. The longer you hold money in a CD account, the more interest you’ll earn.
This type of account is one you may want to open instead of another savings account if you have extra funds that you do not need for a long period of time.
Wells Fargo offers standard and special CDs requiring a minimum deposit of $2,500 to $5,000. These accounts earn 0.01% APY to 0.50% APY plus an interest bonus if you have the CD linked to a Portfolio by Wells Fargo product. Find out more about Wells Fargo CDs here.
Interestingly enough, the APY for Wells Fargo CDs is lower than what you can get from one of the regular high-yield savings accounts we have in our “best of” roundup. You can check out that roundup here.
If you’re shopping for a CD with a more competitive rate and a minimal initial deposit, Ally Bank is a good place to start. Ally Bank has a CD that requires no minimum balance to open and pays out 1.20% APY.
The post Wells Fargo Way2Save Savings Account Review: 0.01% APY, $25 Minimum Deposit appeared first on MagnifyMoney.