How to Get the Most Out of High-Yield Savings Accounts

Recent surveys and studies show that just twenty five percent of Americans have a high-yield savings account. So, for every ten people you know – not even three of them have high-yield savings. That means that three quarters of the American population is losing out on growing their savings by earning interest at rates much higher than traditional savings accounts. You do not need to put down a minimum amount to open all of the account types that will earn you money just by being in the right hands. In this article, we will take a more in depth look at getting the most out of your high-yield savings account. If there is ever a time in your life when it is imperative that you make an informed decision, it is when you select a high-yield savings account to open. The end game goal here is to earn the most interest whilst paying low to no fees. This is entirely possible, read on and I will gladly show you how…

 

Compounded Interest

Look for the high-yield savings accounts that offer you interest that is compounded daily. This interest earned annually can be up to twenty times higher than traditional savings options, giving you far more bang for your buck! You may be able to open a high-yield savings account with your current bank but often the highest rates are available from online banks only. There are quite a few savings products on the market so be sure to select the one that works best for you and your particular financial situations and financial needs.

 

Options

Look for an account option that will not leave you backed into a corner and having to choose between a rock and a hard place. Not all high-yield savings accounts require a minimum fixed deposit amount, it all depends on your selected option. Start from zero minimum deposit but remember that zero deposit equals zero interest earned. Be sure to check for these and other requirements before you open your account.

 

A Penny Saved is a Penny Earned

Although you are fully able to withdraw from most high-yield savings account at ATM’s, online or through wire transfers, it is smarter to leave your savings untouched as much as you can to avoid losing out on money you could have earned had your funds remained untouched. Electronic transfers are easy to set up between your personal bank account and a high-yield savings account, even if they are opened through two different banks.

 

Banks with Benefits

In today’s digital age, options are available all around you. From digital to brick and mortar banks, look for the one with the best perks. Look for one that has a loyalty reward program for savers. Loyalty reward programs are based not only on the amount of money in your account but also rewards you for being with the bank for longer. The longer you have banked with them and the more you have in your account, the higher the reward tier gets.

 

FDIC Insurance

It is advisable to ensure your bank is a registered member of the FDIC, so your deposit account is insured to an amount of at least two hundred and fifty thousand dollars.

 

Balance Your Financial Portfolio

A high-yield savings account is only to be one portion of your financial portfolio. Plan out how your high-yield savings account can complement your other savings or investment accounts to achieve the best results. That way you will have a better idea of how much cash you will need to keep liquid for your particular lifestyle or situation.

 

Minimum Balance

It is important to find out what the minimum amount is required to be held in your high-yield savings account, in order for it to remain open. These may also coincide with a monthly management fee. These minimum amounts and fees vary from one establishment to the next so do your homework before you try and open a high-yield savings account. Sometimes you can avoid fees by keeping your balance above a certain threshold.

 

Plans and Goals

Deciding how to best manage your high-yield savings account will depend a lot on what it is you want to use it for. Whether you are looking to save for a holiday, a large expense or simply short-term savings, draw out a plan for what it is you are looking to achieve and this will help you map out a timeline needed to achieve your goals. You earn more compound interest from a high-yield savings account so being able to do things like put a down-payment down on a house or helping to purchase a vehicle are just some of the reasons for opening an account.

 

End Result

The bottom line here is, it is always wise to save for a rainy day. It is even wiser to save for said rainy day faster than normal. Right now, is a great time to think about saving – especially if you still have a pay check coming in. Making use of a high-yield savings account is an effective and relatively easy way to save for the future. So if you have extra cash and you would like to build up a stash away fund, a high yield savings account allows you to earn compound interest whilst still giving you access to your funds in an emergency. Recent studies show that a disproportionate number of American citizens over the age of fifty-five do not have a retirement plan in place, a whopping twenty nine percent of them! Roughly seventy percent of Americans have less than one thousand dollars in savings, that is a phenomenal amount of people with not very much in terms of a back-up plan if something has to go wrong. After the initial deposit invested, you do not necessarily have to keep depositing large amounts to make having a high-yield savings account worthwhile – even if you only top up with one hundred dollars a month, that is still ample enough to make a long-term difference to your future. Take control of your finances and your future, today!

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.