How to Find High Yield Savings Accounts

It’s smart to want to make the most of your money. However, many investment options tie up your money, making it difficult and time-consuming to access it. A high yield savings account may be the perfect answer.

What Is a High Yield Savings Account?

A high yield savings account is really just a fancy way of saying an account that pays more interest than your average savings account. The average savings account generally pays around .2% and may go up to as much as .7% depending on how much money you have in the account. A high yield savings account, while it won’t earn as much interest as a mutual fund, also doesn’t have the risk and generally pays out 1 to 2% APR.

The first step is to start researching your options. There are many wonderful online banking institutions that provide high yield savings accounts. The benefit to an online banking institution is that it’s tremendously convenient.

When you’re researching, look to find out what the interest rate is, what the minimum amount is to open an account and what the requirements are. Also make sure the bank is FDIC insured. It eliminates risk.

The next step, once you have a list of banks to review, is to search for bank reviews. Find out what their track record is, what fees they charge, and how they’re generally viewed by their customers and your peers.

Most, if not all, banks that offer high yield savings accounts require a few hoops to be jumped through. Namely:

* You’ll be required to make a large initial deposit (not all banks require this)

* You’ll be required to maintain a high balance (not all banks require this)

* Transactions will be limited

* They often require you have another account with them that’s not a high yield account.

Once you’ve chosen the bank you’d like to open your account with, and assuming you are willing to meet these requirements, then the next step is to get your deposit ready to access and to fill out an application.

Once your application has been approved, a bank representative may call you to go over some details. The next step is to transfer the money into the account and start earning interest.

Before opening a high yield savings account, it’s important to have some financial goals. What are you saving for? Is this your retirement savings? Is this your emergency fund savings? Are you saving for college? Generally, high yield savings accounts aren’t recommended for college or retirement because there are low-risk ways to invest your money with a much higher return rate.

High yield savings accounts are great for emergency funds, for saving for vacations and for shorter term investments. They’re also great if you’re saving for a large purchase like a new car or a house.

Saving your money is a sound financial strategy and a high yield savings account is a great way to make the most of it. Find an account that’s right for you and get started saving today!