There are many ways to save money and some options are better than others. A high-yield savings account, for example, is a type of federally insured savings product that earns higher interest rates than regular savings accounts. These products are almost always offered by online banks that don’t have branches. Without the overhead of brick-and-mortar locations, these banks can offer more competitive rates and charge lower fees. 

With a high-yield account you may earn 4% APY compared to a traditional savings account which may offer only .42% APY, so your balances can grow more quickly. The money in a high-yield savings account is not locked in and can be accessed at any time making it perfect for emergency funds. A high-yield savings account also works well for those with short term goals, i.e., saving for new furniture, or saving towards a riverboat cruise, etc. 

However, there are a few downsides to these accounts. They are not ideal for daily banking, interest rates fluctuate depending on the account balance and the Federal Reserve’s benchmark interest rate, and there are more requirements to open a high-yield account than a traditional savings account. But because high-yield savings accounts are safe and can be conveniently opened on-line, they are a great option for anyone wanting to save money who plans to make more deposits than withdrawals.  

Choosing the right high-yield savings account is easy. Bankrate and Nerdwallet list banks, their current APY (annual percentage yield), requirements to open an account, and then update the list monthly. So, no matter the time of year you decide a high-yield savings account is for you, doing a simple online search of the best accounts available will provide all the answers you need to make an informed decision.

Whenever you have questions about financial planning or investment management, call us. One of our financial professionals would be happy to explain Insurance principles and strategies, retirement insurance planning and distribution strategies, estate conservation issues, risk management, and much more. 800-689-3935