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3 Benefits of High-Yield Savings Accounts

Midsection of woman putting coins in piggy bank on table at home
If you want to grow your savings, a high-yield savings account may be right for you.

Nattakorn Maneerat / EyeEm

If you’re tired of paying little or no interest on your savings account, it’s time to explore other options. For example, a high-yield savings account can pay 10 times or more than a conventional savings account.

The process is simple: you deposit money into the account (a minimum balance may be required), the bank pays you interest (which can be compounded daily, monthly, quarterly or annually depending on the institution) and you withdraw as needed (these accounts often have a fixed Limits the number of withdrawals you can make during the period).

Think you’re ready to start making money? Now start exploring your options using the table below

Advantages of high-yield savings accounts

The biggest advantage of a high-yield savings account is the rate at which interest accrues. This allows you to increase your savings and achieve financial goals faster.

Here are some of the main benefits that a high-yield checking account offers:

Interest rates are higher than conventional accounts

High-yield savings accounts often have APRs 10 times higher (or more) than your typical savings account. Your balance grows faster and you benefit more from compound interest.

You can easily withdraw your money

While some high-yield savings accounts limit the number of withdrawals you can make over a period of time, accessing your money is still fairly easy. Many accounts even offer debit cards. These can be helpful if you ever need funds in a pinch.

There is no risk

While other financial vehicles can generate large returns (investing in the S&P 500 yields approx 10.5% per annum, for example), they are also highly subject to market fluctuations and are always at risk of loss. On the other hand, growing your funds in an FDIC-insured savings account is virtually risk-free. As long as your balance is below $250,000, your funds are protected – no matter what happens in the market. FDIC.

Start growing your savings by opening a high-yield savings account today! Use the table below to get started.

There aren’t many drawbacks to high-yield accounts except for fees (maintenance, service and more) and sometimes withdrawal limits. You may also be required to maintain a minimum balance. Make sure you take all these rules and restrictions into consideration before you commit to opening a high-yield savings account

How to find the best high-yield savings accounts

High-yield savings account rates are variable, meaning they change based on market conditions, Federal Reserve policy and the economy over time. Rates may also vary depending on the financial institution’s overhead costs and other factors.

To make sure you get an account with the best rate, you should:

  • Check with your bank, credit union or brokerage first. Many financial institutions offer high-yield savings accounts. Start with companies you already do business with and find out what they have to offer
  • Consider online banking. Online banks have lower overhead costs, allowing them to offer lower fees and higher APYs than brick-and-mortar institutions.
  • Compare more than just rates. You should consider any fees, withdrawal restrictions and minimum balance requirements when choosing which bank to go with.

Just make sure you choose an FDIC-insured financial institution. This protects you (and your savings) if the bank goes under. Use the table below to explore your high-yield savings options and start earning more money now!

Other savings options

While a high-yield savings account offers multiple benefits, there are many different ways to save. Options are specific to your personal financial situation, goals and preferences. Some conservation vehicles to explore:

  • Gold IRA: This type of investment Traditionally acts as a hedge against inflation, so it is particularly timely. While not considered a safe bet for older investors, younger people can check it out to diversify their portfolios. Think of something. It may make sense to buy gold now. =
  • Roth IRA: Roth IRA More traditional but worth exploring. With this type, you pay taxes on your initial contribution but then let the account grow. The distributions you take are then tax-free. You can withdraw your contributions from the account at any time for any reason and you won’t have to pay any penalties or taxes (however, your earnings may be subject to certain fees/taxes).

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