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Why Every American Should Look Into Opening A New High-Yield Savings Account

3 minute read

By Christopher Brown

There are a lot of tools in the diligent saver’s toolbox. Most are already familiar with the most popular ones, like Individual Retirement Accounts and 401(k) plans. Recent macroeconomic trends and bank rate adjustments has led to the emergence of another key savings tool.

High yield savings accounts are far from new. They’ve always delivered higher interest rates than the national savings account average. It’s just that now, more than ever before, high yield savings accounts are offering impressive yields to anyone wise enough to open one.

Today, we’re going to take a closer look at high yield savings accounts, explore their many benefits, and highlight a few of the places offering the best annual percentage yields.

What is a High-Yield Savings Account?

High yield savings accounts are deposit accounts that offer impressive interest rates to entice customers. Primarily a tool of online banks, high-yield savings accounts often pay substantially more than the national average of savings accounts which, according to the Federal Deposit Insurance Corporation (FDIC), is 0.07% APY.

Apart from the ultra-high interest rate, many high-yield savings accounts operate a lot like a regular savings account. You can deposit and withdraw money at your leisure, though some institutions charge usage-based fees. These versatile accounts provide savers a great place to grow their cash without the need to tie it up in stocks or funds.

Benefits of high-yield savings accounts include:

  • Higher interest rates.
  • Less fees.
  • Improved flexibility over similar high-yielding alternatives.
  • No withdrawal limits or penalties.
  • They serve as a great place to store liquid cash for emergencies and to save for short-term financial goals.
Kmpzzz/Shutterstock

Why Now Is The Right Time To Open One

Now is one of the best times to open a high-yield account to park your cash. You can thank the Federal Reserve for that. The recent string of increases to the federal funds rate is good news for those that like to save.

Higher federal funds rates creates an incentive for financial institutions to raise the rates they pay on high-yield savings accounts. It’s not an immediate change, but over time, high rates lead to competition between banks.

You’re already seeing the effect of increased fed rates on high-yield savings accounts across the country. Financial institutions are advertising some of the most competitive APY rates the country has seen in years. Read ahead for a list of the top rates available to savers like you right now.

Best Offers On The Market

The top high-yield savings account rates change from month to month. Granted, the names at the top of the latest list are among the industry leaders frequently. Right now, the FDIC’s national savings account average currently sits at 0.24% APY. That rate is dwarfed by as much as 17 times, thanks to the following list of best APY offers on the market today:

UFB Direct, High-Yield Savings Account

  • 4.11% APY
  • No minimum initial deposit.
  • No minimum ongoing balance.
  • No monthly fees.

Salem Five Direct, eOne Savings

  • 4.10% APY
  • $10 minimum initial deposit.
  • No minimum ongoing balance.
  • No monthly fees.

Customers Bank, High-Yield Digital Savings Account

  • 4.05% APY
  • $0.01 minimum initial deposit
  • No minimum ongoing balance
  • No monthly fees

CFG Bank, High-Yield Money Market Account

  • 4.05% APY
  • $1,000 minimum initial deposit.
  • $1,000 minimum ongoing balance to earn state APY.
  • No fees with $1,000 ongoing balance.

Bask Bank, Interest Savings Account

  • 4.03% APY
  • No minimum initial deposit.
  • No minimum ongoing balance.
  • No monthly fees.

Talk about competition! This is just the tip of the iceberg too. A quick search online can uncover even more competitive offers from some of the biggest in financial services including Capital One, PNC Bank, Lending Club, and more.

Ready, Set, Save!

It may not seem like a lot now, but growing your nest egg with the aid of a high-yield savings account can make a sizable difference over the long term. A few percentage points here could mean thousands of dollars to your retirement savings.

That’s not to say that you need to sign up for a new account right this instant either. Instead, it would be wise to stay up to date on all things savings to ensure that you aren’t leaving dollars on the table and in someone else’s pocket.

As it stands right now, high-yield savings accounts present a great opportunity to grow your cash without having to sacrifice liquidity. If that sounds good to you, consider cashing in on one of the top rates in the country.

Key Takeaways

  • Grow your savings without tying it up in long-term holdings with a high-yield savings account.
  • With rates as high as 4.11% APY, there’s never been a better time to open an account of your own.

Christopher Brown

Contributor

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