Making money off of money can be done at many banks, but they don't have to disclose better deals

Banks don't owe consumers their best
deals. (Adobe Stock photo)

Americans who choose banks with higher savings interest rates can make more money with little work; however, some U.S. banks hope consumers are too confused or hassled to bother making a switch.

"For the last few years, anyone keeping $10,000 in a high-yield savings account has earned close to 4% annual interest, or about $400 a year," reports Ben Blatt of The New York Times. "The nation’s three largest banks — Bank of America, Chase and Wells Fargo — offer 0.01% on their standard savings accounts. That works out to $1 in interest a year for a $10,000 deposit."

Sometimes banks offer additional perks to make up for their abysmal rates, but most believe "their customers won’t hunt for better deals out of inertia," Blatt explains. "Banks know their customers are generally not attentive to account details. A study commissioned by Capital One found that many people check their savings account less than once a month, and about half don’t know what interest they are earning."

While it may sound unethical, banks "have no fiduciary duty in many cases and can profit from customers’ confusion," Blatt reports. "The Consumer Financial Protection Bureau said one bank, Capital One, went too far by intentionally creating confusion so that customers wouldn’t know to switch to a higher-paying account at the same bank."

While sowing confusion may be wrong, part of a bank's purpose is to make money. Scott Pearson, a lawyer who represents banks in regulatory matters, told Blatt, “I don’t know why anyone would think that it’s the bank’s job to tell you that you can get a better deal somewhere else or that they’ll give you a better deal. That is just kind of a shocking and unprecedented theory in my view.”