What is a High-yield Savings Account?
A high-yield saving account is a particular type of federally insured savings account that allows you to earn lots of money while saving with high-interest rates. The rate offered on a high-yield savings account is better than the national average.
The traditional way of banking was that people hold a savings account with banks in which they open their checking accounts. Therefore, making transactions between the two accounts much easy and faster. But with the recent development of internet-only banks, old or traditional banks have now engaged in online account opening across the world. This has eventually led to high competition on savings rates which create a new development of High Yield Savings Accounts.
Comparing the high-yield savings account rates and the national average, you can come to the conclusion that there is a significant increase. For instance, you have a holding of $5,000 savings, the national average interest rate is 0.10% APY, you get to earn 5$ for a year. But if you save your money or $5,000 on a high yield savings account, you get 2%APY which means you have earned $100.
The method used in earning high significant interest is that you need to have your savings account in one institution and your checking account at another institution.
How do I Choose the Best High-interest Savings Accounts?
If you’re looking for the best high yield savings accounts, there are certain factors you need to consider. You won’t want to open a high-yield interest savings accounts that charges monthly fees. If you’re shopping for high-yield savings accounts especially at a new institution, here is what you need to watch out for.
Questions like how much interest does the account offers is it a standard rate or an introductory promotional rate is what you need to ask yourself. Generally, Savings account rates are flexible and can vary or change at times.
Required Initial Deposit
Also, you need to know the initial deposit you need to put in your account when opening a new high yield savings accounts. You need to ensure that you’re comfortable with the deposit.
Minimum Balance Required
Also, you need to know the minimum balance required to keep your account active. having the comfortability of knowing your minimum threshold is a required factor.
One question you need to know is that if the bank or credit union charges any fees on the account. If the bank or credit union charges any fee, you can avoid it by ensuring your balance is over the minimum threshold.
Links to Other Banks or Brokerage Accounts
You can find out if the bank or brokerage will enable you to create a link between your high-yield savings account as well as your deposit account to another bank or brokerage.
How to Open a High Yield Savings Account
For those that already have enough competitive high-yield savings accounts with your recent bank, opening a new high yield savings accounts will be simple and fast. You can simply use the online banking portal to open an account by providing your personal information since you’re already a member of the institution.
But if you’re opening a savings account at a new institution, there are various processes you’ll need to follow. This will also request your personal information like driver’s license, social security number, and some relevant information.
Best High Yield Savings Accounts
This is account to Bankrate.com
|LendingClub Bank High Yield-Savings Account||0.60%||None|
|Alliant Credit Union High-Rate Savings Account||0.55%||None ($1 for paper statements)|
|Comenity Direct High-Yield Savings Account||0.55%||None|
|Quontic Bank High Yield Savings||0.55%||None|
|CIBC Bank USA Agility Savings Account||0.52%||None|
|Vio Bank High Yield Online Savings Account||0.51%||None ($5 for paper statements)|
|Ally Bank Online Savings Account||0.50%||None|
|Citibank Accelerate High-Yield Savings||0.50%||None|
|Live Oak High-Yield Online Savings||0.50%||None|
|Marcus by Goldman Sachs High-Yield Online Savings Account||0.50%||None|
|Synchrony Bank High Yield Savings||0.50%||None|
|TAB Bank High Yield Savings||0.50%||None|
|Pentagon Federal Credit Union Premium Online Savings Account||0.50%||None|
|TIAA Bank Basic Savings||0.50%||None|
|Popular Direct Select Savings||0.45%||None|
Are High-yield Savings Accounts Safe?
Absolutely, yes, a high-yield savings accounts is a safe and secure type of saving account offered by banks and credit unions. It federally insured more than $200,000 per depositor. Even nonbank providers partner with banks in other to opt for insurance. Accounts at banks are secured by Federal Deposit Insurance Corp, and credit unions accounts are secured by National Credit Union Administration, so you don’t need to worry.