And why do you need one?
Are you interested in finding a way to maximize your savings? If so, a high yield savings account might be the perfect solution for you!
High Yield Savings Accounts are savings accounts that offer a much higher interest rate than traditional savings accounts allowing account holders to earn more money on their savings over time. They’re an excellent resource for anyone looking to grow their savings more quickly.
Some of these accounts typically require a higher minimum balance and may have limitations on the number of withdrawals or transfers allowed per month, which is not necessarily a bad thing since, after all, your goal is to grow the account.
Benefits of a High Yield Savings Account
- Earn higher interest: With a HYSA, you can earn a higher interest rate on your savings than with a traditional savings account, which means your money can work harder for you.
- Low risk: They are typically FDIC-insured, This makes them a low-risk option for saving money, and you can feel confident that your money is safe and secure.
- Easy to open and manage: High yield savings accounts are easy to open and manage, often with no fees or minimum balance requirements. Many banks also offer online banking and mobile apps, making it easy to track your savings and manage your account from anywhere.
Uses of a High Yield Savings Account
Savings are always a good thing to have, and if they are growing on your bank account, even better, but HYSA can be particularly useful to keep:
- Emergency Fund — You can earn interest on your savings while still having quick access to your money in case of an emergency.
- Irregular Expenses — Saving for specific goals and managing revolving expenses can be daunting, but once you calculate how much you need to save, you can quickly transfer it to your HYSA. If you’re a visual person like me, Ally is a great resource to help you organize and keep track of your money.
- You can reach specific saving goals faster by earning more interest.
Make the Most out of your HYSA
- Set up automatic monthly contributions — Schedule a transfer straight from your paycheck or as soon as your direct deposit hits your account. It will also help you create a habit without overthinking it.
- Control temptations — When it comes to saving money, the saying “out of sight, out of mind” can be pretty effective. Having your savings in a different bank than your checking account can help you grow your money by avoiding quick transfers between your accounts.
If you’re interested in opening a High Yield Savings Account, I recommend researching the best rates and terms that fit your needs and financial goals. Some good options we recommend at 3rd Decade include CIT, Marcus, or Ally. As with any other account, ensure you understand any fees or restrictions associated with the account before signing up.
Start reaping the rewards of a high yield savings account and watch your savings grow!