Not all savings accounts are made alike. When it comes to stocking away your savings, there’s opportunity for that pot of money to grow all on its own! High-yield savings accounts can offer interest rates that are 20-25 times higher than the national average, helping to grow your finances without any additional work.
Why Choose a High-Yield Savings Account?
While interest rates are currently low, a high-yield savings account (also categorized under interest bearing accounts) can still earn you 12x more than a regular savings account. These days, the average bank offers interest rates as low as 0.01%, whereas high-interest options range from 0.5 – 3.84%. Remember, the higher the number, the more money you’re seeing added into your balance.
Which Type of Account Will Typically Have the Highest Interest Rate?
Take some time to compare and contrast different high-yield savings accounts to determine which one makes the most sense for your financial needs and current lifestyle. While the interest rate is important, there are a few other factors to take into consideration:
What to Look for in a High-Yield Savings Account:
- What is the current interest rate offered, and does it change?
As you compare different high-interest savings account options, take note of what each institution offers and what affects that number. Some will only offer special rates for a limited time as part of promotional deals, while others may say their rates are flexible and can change any time.
- Is there a minimum amount required?
When you open your high-yield savings account, is there a minimum amount that you have to deposit? Is there a minimum that you have to keep in there? Make sure it’s an amount that you feel comfortable maintaining. By keeping tabs on any minimum requirements, you’ll avoid any surprising penalties or fees!
- Is money easily transferable between banking institutions?
Because most banking institutions don’t offer high-interest savings accounts, you may need to open one at a new establishment. Since you’ll want to move money between checking and saving, it’s helpful to know how easy transferring funds will be! Is there a maximum number of transfers allowed each month? Does it take a certain number of days for the money to move? Those answers help you plan!
- Are there fees to have this account?
While some interest-bearing accounts require maintenance fees, there are a lot of options that don’t. Take note of that when you’re looking to choose one! Sometimes paying a fee is worthwhile, if the benefits outweigh the cost. Other times it’s best to avoid fees altogether.
Trajan Wealth Has You Covered
We want to see your money work for you. At Trajan Wealth, we love seeing our clients learn about their financial well-being and make informed decisions about their portfolios. Connect with us to learn how a high yield savings account can grow your wealth and help enhance your financial future.