What is a High-Yield Savings Account?

High-yield savings accounts are a type of federally-insured deposit account which aims to earn interest rates much higher than the national average.

What is a High-Yield Savings Account?

- Typically, the best high-yield savings accounts offer 15-25x more than the national average interest rate on regular savings accounts - Most commonly offered by online-only banks like CIT Bank, Axos Bank, Comenity Direct, etc., because of their lower cost structure than brick-and-mortar banks

High-Yield Savings Account Highlights:

Undoubtedly, holding accounts at multiple institutions can add a wrinkle of complication to managing your finances. However, if you choose to hold accounts at separate institutions, know that electronic fund transfers (EFT), administered by the Automated Clearing House (ACH), make this setup easy to handle.

Are There Trade-Offs to Holding Accounts at Different Institutions?

Let’s review some of the most important factors which can affect the attractiveness of opening a high-yield savings account.

What to Look for in a High-Yield Savings Account

To get a sense of how much you’ll benefit by moving your money, you will need to compare against the interest you already earn in your existing savings account (or checking account).

1. Interest Rate

When opening a high-yield savings account, banks might require you to deposit an initial amount of money to qualify for the advertised rate.  This ensures the bank gets what it is paying for by offering you an attractive rate. 

2. Minimum Initial Deposit

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