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High Yield Savings Account Today Earning high interest rates — especially compared to pandemic-era lows just a few years ago.
The Federal Reserve’s interest rate hikes to address ongoing inflation concerns have raised interest rates on everything from loans and credit cards to savings accounts and CDs. In the past year. While this may make the cost of borrowing money more expensive, it also means you can earn a lot more on the money you save.
Today, many Top High Yield Savings Accounts Offers upwards of 4.00% APY (Annual Percentage Yield) while some are even inching towards 5.00%. These accounts come with minimal fees or requirements and other features that can make them very useful Keep your money safe When you benefit from additional interest.
You can start by exploring today’s top savings account interest rates.
How much does a high-yield savings account earn annually?
The amount of interest you earn with a high-yield savings account depends on the amount of money you deposit and your interest rate.
Say you have a $2,000 balance Traditional savings account Earning close to zero interest. You find a high-yield savings account with a 4.25% APY and no fees or minimums and decide to deposit your entire $2,000 balance. Within a year, you can increase that amount to $2,085 just by transferring it to a new account and letting it accrue interest.
Now, say you put the original $2,000 balance in a high-yield account earning 4.25% APY, but you decide to save more by depositing $100 into the account each month. Over the course of a year, your total savings balance will be approximately $3,308. This includes your original $2,000 balance, $1,200 in contributions, and about $108 in accrued interest.
Learn more about how much your balance can earn and compare rates on today’s top high-yield savings accounts.
How do you earn interest with a high-yield savings account?
High-yield savings accounts earn compound interest, which is good for that Increase your balance over time. Many accounts collect interest daily or monthly.
To begin with, interest accrues on your deposited balance when you open your account. But over time, your interest income increases as part of your overall balance. Interest accrues on your opening balance plus interest on your earnings and any contributions you make to the account.
Another factor that can affect your income is interest rates. High Yield Savings Account There are variable interest rates, which means the rate you are offered when you open your account is not fixed. The interest rate on your account will continue to rise over time due to a variety of factors (including the Fed’s interest rate in response to inflation).
Say, for example, you had a high-yield savings account that earned about 3.5% APY last year. If you had a $5,000 balance, you would have earned about $175 a year. But the interest rate is higher this year; You can find an account with 4.5% APY. If you deposit the same $5,000, you’ll earn a total of $225 a year. That’s an extra $50 just for interest, before factoring in any additional contributions you might make.
How to choose the right savings account
The best way to get the most out of your savings is to make sure you Have the right high yield savings account for your goals.
Interest is a big factor. Compare different account options to ensure the one you choose has a competitive interest rate. Even if it’s not that high forever, scoring a great interest rate today can set you up for maximum interest over time.
Other details to look for in any high-yield savings account include fees, minimum balance requirements, FDIC insurance and options for accessing your cash. See details of this account on the bank’s website or in the account terms. Taking the time to compare can help you find the best account for your financial goals and keep your money safe.
Start comparing options with some of the top savings account rates now.
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