A conventional savings account is a great way to set aside money. However, sometimes it’s not enough. It’s time to consider alternative possibilities if you’re fed up with low-interest savings accounts. That’s why a high-yield savings account can help you get more and achieve your financial objectives.
Advantages of a High-Interest Savings Account
Account holders can earn considerably more by creating a high-yield savings account or by moving an existing savings account into one. Here are some of the advantages of opening a high-interest savings account:
1. They are Simple to Open
Going to a bank and filling up a ton of paperwork is a hassle and discourages people. But it’s easy to open up a high interest savings account with Great Southern Bank.
Establishments like Great Southern Bank can help you get started in person and online. Several even offer debit cards that users can use just like they would with any other conventional bank account. Also, some banks have an app to allow you to monitor the progress of your savings.
2. Usually Have No Fees or Minimum Balance Requirements
Another benefit of opening a high-interest savings account is the absence of monthly fees and minimum balance limitations. Also, you can have unlimited transactions, but it still depends from bank to bank. But having no limit can considerably lower your banking fees if you typically make a lot of transactions.
3. Pays Higher Interest
The statement “make your money work for you” is an old one that everyone wishes to do. High-interest savings accounts are specifically made to accomplish this.
A high-yield savings account’s main advantage is its capacity to compound interest at a rate higher than a conventional one. Essentially, compounding is the process of gaining interest on interest. You earn income daily with a high-interest savings account since it compounds interest daily. Also, you don’t need a large initial investment to start saving money.
4. Your Funds are Secured
Anybody with a savings account wants their money to be safe and secure. That’s why the majority of banks and credit unions are insured. And if the bank or credit union goes out of business, you are still guaranteed to receive your money.
Before opening a high-interest savings account, always verify that an institution has the necessary insurance. Investing your money in them without insurance could be extremely risky.
5. Protected From Inflation
Inflation is at an all-time high right now around the world. And when inflation is excessively high, your money loses value. Then, in turn, it lowers your purchasing power. However, placing your money in a high-yield savings account helps mitigate or even eliminate these losses.
You win out if your account has an interest rate higher than the inflation rate. This is because you have gained more money than you have lost. You will still lose purchasing power if inflation is larger than your interest rate, but the earnings in your savings account will lessen the effect.
In fact, you may achieve long-term financial security by opening an account with an interest rate higher than the inflation rate.
6. It’s Simple To Transfer Money
Some might think you can’t get or transfer money with a high-interest savings account. But that’s not true. You can still transfer your money in your high-interest account to other bank accounts. Simply connect your account to your other accounts, and you’re ready! But keep in mind that the processing period for these transfers can occasionally exceed two business days.
Additionally, your funds are not locked in and can be withdrawn anytime without incurring fees. High-interest savings accounts are flexible, which makes them perfect for short-term savings objectives.
What To Look For in a High-Interest Savings Account
It’s a challenge to get the best high-interest savings account because of the many options. To help you narrow down your choices, we’ve listed items you need to look for a high-interest savings account:
1. Interest Rate
Naturally, after knowing that a high-interest savings account gives more interest, you want a bank that offers high interest. You need to know how much interest is being paid on accounts. Plus, you can also ask if the rate is the regular one or just a special introductory price.
2. Deposit Options
Check if the bank provides a mobile check deposit app for smartphones. It will be a great component if you anticipate depositing checks into the account virtually. If not, you can check if you mail cheques or use an ATM to deposit them.
3. Compounding Method
Another factor you need to check is the compounding method the bank uses. The frequency of interest compounding can be specified by banks and might range from daily to annual.
But usually, frequent compounding will potentially raise your take-home income. Consider the compounding component when comparing accounts by annual percentage yield rather than the annual interest rate.
4. Minimum Balance and Initial Deposit
Always know how much money you must continue to maintain in the account. You should always feel confident that you meet the minimum requirement because falling short may result in charges or invalidate the anticipated interest rate. Additionally, always ask for the minimum amount you need to deposit to start a high-interest savings account.
5. A Bonus Checking Account
Even if you’re not required to keep your savings and checking accounts with the same bank, having both are good. So for a bonus, you can check if the bank offers a checking account with your high-interest savings account.
Opening a High-Interest Savings Account
There is never a bad time to start making extra money, especially now when inflation is still harsh. That’s why you can greatly benefit from opening a high-yield savings account as a useful compromise. It gives you a special chance to earn a lot more interest than you might with a typical account. A high-interest savings account is also low-risk, secure, and simple to open due to many online and physical institutions.