Why a High Yield Savings Account is Important Now

It’s been a rough few years for Americans’ wallets. During epidemics, regularly Increase in interest rates And with inflation, many people are finding it difficult to make ends meet. A Recent Federal Reserve Research35% of respondents reported that their financial situation had worsened in the past year alone, and nearly a quarter said they were “just getting by” or “having a hard time getting by.”

Even worse, 13% reported they couldn’t cover a $400 emergency expense with cash. This inability can lead to debt, which only hurts your finances.

Whether you’re currently struggling or not, being able to pay for sudden large expenses is important to your financial security. Experts recommend keeping at least three to six months’ worth of expenses in one emergency fundBut even if you can contribute a small amount now, it can help ease the stress if the worst happens.

One of the best places to keep these funds is a High Yield Savings Account. Check out current interest rates to compare your high-yield account options and start earning more money today.

Why a High Yield Savings Account is Important Now

If you’re not putting your savings in a high-yield savings account, you’re missing out on these benefits:

You will earn more interest

When it comes to emergency funds, every dollar and cent counts. In a savings account, your deposits earn extra money, thanks to interest. And with a high-yield account, they can earn up to 12 times greater than a Regular savings account.

The average rate on regular savings accounts is currently around 0.40%. In contrast, high-yield accounts earn 5% or more This difference can really add up over time, your help Savings add up quickly Without any extra effort on your part.

Find out how much more you could earn by looking at current savings rates here.

Your money will be safe

A high yield savings account is a safe place To save your cash. Unlike investing in the stock market, there is virtually no risk involved with a savings account. Your interest rate will fluctuate with the federal funds rate, but you’ll never lose the money you’ve already deposited or the interest you’ve already earned.

Plus, accounts with FDIC insurance offer protection up to $250,000 per account per institution — welcome news later. Bank failure We saw earlier this year.

You can avoid fees

High-yield savings accounts have lower fees than other types of bank accounts. Many do not carry maintenance fees, balance requirements or account opening fees. This means you can save more money without worrying about penalties eating into your savings.

“For anyone who feels they don’t have enough to save, many top accounts typically start with a $1 minimum, which is not a high bar to meet,” says Shane Cummings, CFP, CEPA, AIF, wealth advisor and technology director at Hulbert. Cyber ​​Security at Hargrove. “They also often have no monthly fees, so there shouldn’t be a serious barrier, even if someone wants to save less than $100 a month in an online savings account.”

Check out some of the top options available today This is a no-fee savings account.

You can easily access funds when you need them

In case of emergency or unexpected expenses, quick access to your funds is essential. A high-yield savings account allows you to withdraw your money at any time without penalty, unlike other deposit accounts CD.

Plus, with Online bankingYou can easily transfer money between accounts.

“Most high-yield savings accounts offer online and mobile banking, making it easy to access your funds from anywhere, anytime,” says Kristen Beckstead, CFP, ChFC, vice president and financial planner at First Horizon Advisors.

Bottom line

An emergency fund is a must in any economy, but it’s especially important in today’s uncertain financial climate. And, arguably, the best place to put this fund is in a high-yield savings account.

These accounts offer a combination of security, flexibility and high interest rates that can help you reach your financial goals faster than regular savings accounts. Also, many charge few or no fees, allowing you to keep more of the money you earn from interest.

Regardless of your current situation, you owe it to yourself to open a high-yield savings account Switch to one If your current account does not earn much interest.