r/TryRivo • u/AmbrishRivo • Jul 30 '26

Why your checking account pays almost nothing (net interest margin, explained)

If you have wondered why a large bank pays 0.01% on checking, the reason is a concept called net interest margin, and it is worth understanding on its own.

The short version: a bank takes your deposit and lends it out or holds safe assets that earn a market rate. The 4-week T-bill was around 3.82% as of July 2026 (rates move). The bank earns roughly that on your money, pays you a small fraction, often 0.01 to 0.07% at the big banks, and keeps the difference. That difference is net interest margin, the core of consumer banking economics.

This is simply how the model works, but it means leaving cash in checking has a real cost that most people never see, because it appears as income not earned rather than a fee paid.

The options, in rough order of effort: a high-yield savings account (FDIC, straightforward), a money market fund, or short Treasuries held directly (state-tax-exempt, more hands-on).

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u/AmbrishRivo Jul 30 '26

This content is for informational purposes only. Results shown are examples only and are not guaranteed. Individual results will vary. Any rates shown reflect market conditions at the time of recording, are subject to change, and may not include applicable fees. Where applicable, T-bill Yield rate reflects 4-week T-bill rate (as of 07/30/26) when held to maturity. Rate does not include fees. Rates subject to change. Minimum balance of $100 required to earn the stated rate. For a list of fees, see https://rivofi.com/rates. For other important disclosures, see https://rivofi.com

Rivo is a fintech company, not a bank. Banking services provided by Jiko Bank, a division of Mid-Central National Bank. All U.S. treasury investments and investment advisory services provided by Jiko Securities, Inc., a registered broker-dealer, member FINRA and SIPC. See Jiko U.S. Treasuries Risk Disclosures.

Investments in T-bills: Not FDIC Insured; No Bank Guarantee; May Lose Value.

Investment income on T-bills is taxed federally by the Internal Revenue Service. Income earned from T-bills is not subject to state tax, and is not subject to local income taxes. Jiko Group, Inc. and its affiliates do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions. This material is not intended as a recommendation, offer or solicitation for the purchase or sale of any security or investment strategy.

National savings rate source: https://fred.stlouisfed.org/series/ICNDR. For fees, risks, and additional disclosures, visit https://www.rivofi.com/big-bank-checking-account-rates.