The main goal behind earning is the luxury and comfort of today and the security for tomorrow. However, when planning for suture, exploring the difference between saving and investing is crucial. More often than not, people use these terms interchangeably and end up with money in places that will not reach its full potential. While investments are made with a viewpoint of growth and higher profits, savings are done to store money for safety. This is where the importance of the highest interest savings account comes in. Use the Beem app to get a high yield savings account and supercharge your savings today.
While each portfolio differs, and every saving-investment plan will look different, not only for different people but also for the same person over the years, investing 10% vs. saving around 20% of your income is an excellent point to start. Let’s understand how to get the highest interest savings account.
What Is A High-Yield Savings Account?
A high-yield savings account is the most reliable way to go around. Though misunderstood as a standard savings account, a high-yield account is dedicated to saving money. While the interest rate in a regular savings account pays an interest rate of 0.43% APY, the interest rates for a high-yield savings account can go as high as 20 to 25 times more than average savings accounts. However, apart from paying a much higher interest rate on the savings, this account is similar to a standard savings account. Here are some of the critical features of a high-yield savings account:
FDIC or NCUA Insurance:
High-yield savings accounts are insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) in the United States, making them highly stable and secure way of saving.
Easy Access
One of the main concerns of people who would prefer to switch to a high-yield savings account is the loss of liquidity that comes with a standard savings account. However, contrary to popular belief, high-yield savings accounts are highly liquid and have easy access.
No Minimum Balance
Only have a small chunk of the paycheck forked out to start your savings plan. No worries! A high-yield savings account has got you covered, as most banks have no limit for a minimum balance. You can begin with any sum you feel comfortable with and go forward at your ease. And even if you cash out a significant amount once you have saved up, you don’t have to sweat over maintaining a minimum balance.
Online and Mobile Banking
The global pandemic COVID-19 more than nudged the economy toward a digital state, and now there is no going back. The banks understand the consumers’ need for a frictionless experience over digital platforms, and hence, all the services are now online. You can manage your high-yield savings account digitally, making the process much easier.
No Monthly Fees
To assist the customer in saving as much as possible, banks devise the terms and conditions of a high-yield savings account differently than those of a standard account. One of the most indirect yet significant ways is charging zero or next-to-zero monthly fees on such accounts.
Tiered Interest Rates
A tiered interest rate is a lucrative feature for high-yield savings accounts. The concept of the tiered interest rate is simple: the higher the efforts, the better the results, i.e., the more your interest rates go up as your savings do. It is a financial up and a great motivator to be wiser with your money and save more.
No Risk of Market Fluctuations
As a high-yield savings account is a form of saving, it is safeguarded from the market dynamics. The economic trends, may a bull or bear, do not impact the account’s interest rate, which is pre-determined and governed by the federal institutions.
Limited Transactions
As the primary purpose of such an account is to promote savings with a higher yield, it is a common practice among banks to limit the number of transactions that can be conducted for the account. However, the cap on the quantum of transactions does not take away from the account’s ease of operations and liquidity.
See also know about: How to make a mobile check deposit
How Do High-Yield Savings Accounts Work?
High-yield savings accounts operate on the principle of compound interest, where your initial deposit earns interest, and that interest, in turn, generates more interest. This compounding effect can supercharge your savings. These accounts offer higher interest rates than traditional savings accounts, and the more frequent the compounding (such as daily compounding), the faster your savings grow. It makes high-yield savings accounts an effective tool for building your savings over time, as your money works harder for you, earning not only on your initial deposit but also on the interest it has already accumulated.
How To Get The Highest-Interest Savings Account
The interest rate you receive on your high-yield savings account is based on several factors, mainly the bank you operate with. So, to secure the highest-interest savings account:
Bank Comparison
Begin by thoroughly comparing different banks and financial institutions. High-yield savings accounts are easily accessible from online banks, traditional banks, and credit unions. However, it’s essential to note that interest rates can vary significantly between these institutions.
Online Bank Advantage
Consider opting for an online bank, which often offers some of the most competitive interest rates. Their reduced operating costs enable them to provide customers with higher yields. Focus on well-established online banks with a track record of consistently offering attractive rates.
Promotional Rates
Check for some banks’ promotional interest rates to new customers or specific account types. While these promotions can be beneficial, it’s crucial to understand their duration and the standard rates that apply once the promotional period ends.
Examine Account Terms
Carefully scrutinize the terms and conditions of the savings account. Look for any hidden fees or requirements that may impact your interest earnings.
Tiered Rate Options
Explore accounts with tiered interest rates, where the rate increases as your account balance grows. If you anticipate maintaining a substantial balance, this arrangement can be advantageous.
Credit Union Consideration
Consider credit unions, which often provide competitive rates and prioritize their members’ interests. This member-focused approach can result in more favorable account terms.
Automatic Transfers
Some high-yield savings accounts offer higher interest rates if you set up automatic transfers from your checking account. This convenient feature boosts your savings and increases your interest earnings.
Stay Updated
Rates can fluctuate due to market conditions and bank policies. Reviewing these changes ensures you continually benefit from the best available interest rates.
Top High-Yield Savings Accounts In 2023
While browsing your options for the best high-yield savings account, consider the following:
Milli Savings Account
APY: 5.25%
Reasons to Choose:
- It comes with no fees, ensuring charges will maintain your savings.
- There are no minimum balance requirements, making it accessible to all savers.
- You can make withdrawals without any limits or restrictions.
- The account allows you to create “Jars” to designate funds for specific financial goals.
- Regardless of the balance in each Jar, they all earn the same high interest rate.
- Interest in this account compounds daily, enhancing your savings growth.
- Milli Bank operates exclusively through its mobile app, catering to mobile-savvy users.
- It is a division of the First National Bank of Omaha (FNBO).
- This account is ideal for individuals who prefer the convenience of smartphone-based banking.
UFB High Yield Savings
APY: 5.25%
Reasons to Choose:
- Provides a complimentary ATM card for convenient cash withdrawals at over 91,000 fee-free ATMs.
- Accounts are offered through Axos Bank, known for its financial services.
- All balances currently earn the same high APY of up to 5.25%, with no tier-based restrictions.
- There are no requirements or hoops to earn a competitive interest rate.
- A no-fuss account with no monthly fees.
- There are no minimum deposit requirements, making it accessible to all savers.
- Interest compounds daily, helping your savings grow faster over time.
- Thanks to its better cash access, it is a smart option for those needing to withdraw funds as cash.
Bask Mileage Savings Account
APY: 5%
Reasons to Choose:
- No monthly fees or minimum deposit requirements are associated with this account.
- There’s no need to maintain a specific balance to earn interest.
- Apart from fees for outgoing wire transfers, this is a basic savings account with minimal fees.
- Bask Bank operates exclusively online, without physical branches.
- Customers have access to support via email and phone.
- Interest compounds daily, helping your savings grow faster over time.
M1 High-Yield Savings Account
APY with membership: 5%
APY without membership: 1.50%
Reasons to Choose:
- Earn 5.00% APY with M1 Plus membership.
- Non-members still earn a competitive 1.50% APY with no minimum deposit requirement.
- M1 Plus membership offers additional perks like cash back on credit card spending, loan discounts, and more investing options.
- M1 Plus membership costs $10 per month or $95 per year after a three-month free trial.
- M1 is a fintech company, which means it offers innovative financial services.
- M1 savings deposits are held by FDIC-insured B2 Bank, ensuring your deposits are protected.
- Deposits can be insured up to $5 million through the Insured Deposit Network Program.
- No minimum deposit or balance requirements provide flexibility.
- M1 offers a full suite of banking products, including checking, investing, and lending options.
Bread Savings High-Yield Savings Account
APY: 5%
Reasons to Choose:
- Tends to maintain high-earning rates even when market rates fluctuate.
- There are no monthly fees, ensuring your savings remain untouched.
- Allows unlimited mobile check deposits for added convenience.
- Supports fee-free incoming wire transfers, saving you money on transactions.
- Bread Savings also offers competitive Certificates of Deposit (CDs) for longer-term saving goals.
- Ideal for individuals focused on hands-off saving and frequent deposits.
- It is well-suited for those who prioritize saving over checking in the same account.
- It’s an excellent option for savers who don’t require frequent cash access.
How To Earn With A High-Yield Savings Account
To earn effectively with a high-yield savings account, consider these strategies:
Maximize Your Interest Rate:
Choose a bank with the highest interest rate. Additionally, look for the following features to maximize your earnings:
- Tiered Interest Rates: Opt for accounts with tiered interest rates. These accounts reward higher balances with even more competitive interest rates, increasing your earnings as your savings grow.
- Compounding Interest: Select an account with compounding interest, preferably daily. Compounded interest allows your savings to grow on your initial deposit and the interest you’ve already earned, supercharging your returns.
- No Extra Costs/Fees: Avoid accounts with excessive fees, such as maintenance fees, that can eat into your earnings. Seek out accounts that offer fee-free maintenance.
Dedicated Saving
Commit to regular deposits into your high-yield savings account. Some strategies to consider include:
- Minimum Balance: Maintain a minimum balance to unlock higher interest rates. It ensures you’re getting the most out of your savings.
- Limit Transactions: Be mindful of the transaction limits on your account. While high-yield savings accounts offer liquidity, they may restrict your monthly transactions. Plan your withdrawals accordingly to avoid penalties and maximize your savings.
Conclusion
A highest-interest savings account offers a reliable avenue for nurturing your savings. Select a bank with competitive interest rates, tiered interest models, daily compounding, and minimal fees to optimize your earnings. Simultaneously, embrace disciplined saving by consistently depositing funds and potentially maintaining a minimum balance to unlock more lucrative returns. By adhering to these strategies, you can harness the potential of compound interest and witness your savings flourish gradually. With numerous reputable choices accessible, you can discover the ideal high-yield savings account to safeguard and grow your financial future. Check out Beem to get updated interest rates and compare the latest best high-yield savings accounts that align with your savings goals and priorities.
Frequently Asked Questions
Q. Is it wise to keep money in a high-yield savings account?
High-yield savings accounts offer a smart way to earn interest while maintaining liquidity.
Q. Can I lose money in a high-yield savings account?
Generally, no, as deposits in high-yield savings accounts are typically insured, reducing the risk of losing money.
Q. Do high-yield savings pay monthly?
Some do, but payment frequencies vary, so checking the account terms for specific details is essential.
