If you’re like most people, chances are you have a savings account. Putting money aside for a rainy day or future purchases is one of the first money lessons many of us learn growing up. But if your savings are in a regular savings account, you could be missing out.
High Yield Savings AccountAs their name implies, similar Regular savings account In many ways. They earn interest based on the federal funds rate, they Protected by FDIC insurance And they allow you to separate money that you shouldn’t touch for a while from the money you use for daily expenses.
But when it comes Earn interest, high-yield accounts easily outperform regular accounts In this article, we’ll explore why you should consider switching to a high-yield savings account today.
Check out the current rates now to see how much more you can earn.
Why you should switch from regular to high-yield savings accounts
Whether you’re opening your first savings account or looking for a new one, here’s why you should look into a high-yield savings account now.
You can earn considerably more
One of the biggest reasons to switch to a high-yield savings account is how much more Interest you can earn.
According to the FDIC, the average APY (annual percentage yield) for a regular savings account is currently 0.39%. In contrast, high-yield savings accounts offer APYs of around 3.5% to 4.5% (or higher). It is 12 times more. Recently, the difference has been more than 15 times. Over time, it can really add up.
“Most of my clients are so used to getting a few dollars or cents in interest from their bank or credit union that the fact that they can now get hundreds or even thousands can make a big difference,” says Dana J. Maynard, CFP, RLP, CEPA, CDAA, recently reported CBS News.
To find the best high-yield savings account for you, review current rates here.
You can secure better terms
Much higher yields are offered by savings accounts Online Bank, which brick-and-mortar banks do not incur overhead costs They often pass these savings on to the customer in the form of lower (or no) fees and lower (or no) minimum balance requirements. This can help you keep more of your money, which can later earn more interest.
“I believe now is a great time to be a saver and be compensated for it,” said Nick Coveu, CFP and founder of Swell Financial. “Smaller banks are struggling for deposits after SVB’s collapse and are trying to lure new customers with more attractive high-yield savings options.”
Accessing your funds is easy
The Best use As is the case for a high yield savings account emergency fund or short-term savings vehicles. Especially for an emergency fund, it’s important to have ready access to your funds whenever you need them.
“High-yield savings accounts typically provide easy access to funds, allowing customers to withdraw their money quickly and efficiently when needed,” says Ryan McCarty, CFP and Principal Advisor at Castle Rock Investment Company. “So you’re not only able to have cash sitting in your account, but you can use it for everyday expenses if needed. With things like money markets and CDs, you have to take extra steps or be penalized. A CD is quick if it costs money.”
Ready to open a high-yield savings account? Start exploring your options here.
“Overall, a high-yield savings account is a great way for consumers to earn more on their money while keeping it safe and accessible,” McCarty said. “I highly recommend that consumers consider opening one, especially for emergency funds or short-term savings goals.”
per Find the best high yield savings accounts For you, I know Observation for what and compare Multiple banks. Whichever you choose, you can rest assured knowing your savings will grow much faster than a regular account.
“Your money is sitting there; it makes sense to do more with it and put it to use,” says Coveu.
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