Punch the clock, work hard, and put a little of your paycheck aside each month. Saving money is a wise financial decision, but there’s more to the story. Choosing the right savings account is key to putting your money to work for you – so it continues to grow at an accelerated pace!
A high-yield savings account offers a higher interest rate than the average savings account – sometimes as high as 5%! That means you’ll get “free” money at the end of the year!
Stashing cash in a high-yield savings account today can have big benefits in the future, so read on to learn more about the best options currently on the market!
What is a High-Yield Savings Account?
High-yield savings accounts earn interest at a much higher rate than traditional money market accounts. The average interest rate for a traditional savings account is just 0.46%, while high-yield savings accounts can earn around 5% in interest! These accounts are typically offered by large banks, credit unions, and online-only financial institutions.
Because there are many options available, be sure to evaluate your financial situation before choosing the high-yield savings account that meets your needs.
How to Choose the Right High-Yield Savings Account for You
Choosing the right high-yield savings account may seem like a daunting task, especially if you’re not well-versed in banking lingo. But we can help! Our team has created a step-by-step guide to help narrow down your choices, so check it out!
1. Is the account insured?
Several bank collapses have made headlines in the last year, causing account holders to lose significant sums of money due to the bank’s lack of insurance protection. These collapses reminded both banks and customers of the need for FDIC insurance.
FDIC insurance coverage protects up to $250,000 per depositor, per account. This means that if you hold $50,000 in your bank and it faces failure, you can rest assured knowing that all your money will come back to you. Our advice? Before signing up with a bank, double-check that it has FDIC insurance.
2. What is the interest rate?
The interest rate is the main differentiating factor between high-yield and traditional savings accounts. Simply put, the higher the annual percentage yield (APY), the more money you will earn over time. Many financial institutions are currently offering rates around 4.35% – with some even soaring up to 5.2%!
Because they enjoy lower operating costs, online banks and credit unions typically offer better rates. That’s why it’s a good idea to do your research and consider all your options before choosing the high-yield savings account that’s right for you!
3. Are there hidden fees and balance requirements?
It’s crucial to note that, while high-yield savings accounts typically have fewer fees than other account types, they may still charge or require the following:
- Maintenance fees
- Withdrawal fees (over a certain limit)
- Fees for dipping below the minimum balance
- Minimum deposit fees
To prevent an unpleasant surprise, simply review the fee structure and entry requirements before opening an account. This helps ensure that fees don’t exceed the potential savings in the long run.
4. Are my funds easily accessible?
Whether you are building an emergency fund or just want to put your hard-earned cash to work for you, it should be easy to access your money if the need arises.
Here are some important features to prioritize when it comes to accessing your money:
- User-friendly mobile banking
- Linked checking account feature for easy transfers
- ATM/ Brick-and-mortar withdrawal access
5. Is this bank convenient?
Unfortunately, interest rates are subject to change. That’s why we recommend selecting a bank you enjoy working with – even if your financial circumstances change. First, imagine the ideal banking experience. If you prefer in-person service, choose a bank or credit union with a physical, brick-and-mortar location near home. If you’d rather do all your banking digitally from the comfort of your home, consider an online alternative.
The Top Ten Best High-Yield Savings Accounts
With so many options to choose from – and so many details to compare – picking the right high-interest savings account can be a challenge. We’ve streamlined your search here, detailing everything you need to know about each account!
SoFi
SoFi High Yield Savings
FDIC Insured: Yes
APY: 4.60%
Opening Deposit: None
Minimum Balance Requirement: No
Type: Online-only
TAB Bank
TAB Bank High Yield Savings
FDIC Insured: Yes
APY: 5.27%
Opening Deposit: None
Minimum Balance Requirement: No
Type: Online-only
Barclays
Barclays Online Savings Account
FDIC Insured: Yes
APY: 4.35%
Opening Deposit: None
Minimum Balance Requirement: No
Type: Online-only
BrioDirect
BrioDirect High Yield Savings Account
FDIC Insured: Yes
APY: 5.35%
Opening Deposit: $5,000
Minimum Balance Requirement: $25
Type: Online-only
American Express
American Express High Yield Savings Account
FDIC Insured: Yes
APY: 4.35%
Opening Deposit: None
Minimum Balance Requirement: No
Type: Online-only
CIT Bank
CIT Bank Platinum Savings
FDIC Insured: Yes
APY: 5.05%
Opening Deposit: None
Minimum Balance Requirement: $5,000 for APY
Type: Online-only
Bask Bank
Bask Interest Savings Account
FDIC Insured: Yes
APY: 5.10%
Opening Deposit: None
Minimum Balance Requirement: No
Type: Online-only
Upgrade
Upgrade Premier Savings
FDIC Insured: Yes
APY: 5.21%
Opening Deposit: None
Minimum Balance Requirement: $1,000
Type: Online-only
Everbank
EverBank Performance Savings
FDIC Insured: Yes
APY: 5.15%
Opening Deposit: None
Minimum Balance Requirement: No
Type: Online-only
Capital One
Capital One 360 Performance Savings
FDIC Insured: Yes
APY: 4.35%
Opening Deposit: None
Minimum Balance Requirement: No
Type: Online-only
Bottom Line? Make Your Money Work for You!
Why leave your money sitting in an account when it can earn more – without any effort?
Opening a high-yield savings account is a fantastic strategy to save for emergencies or future goals. Save smarter, don’t work harder!
At Auto Money Title Loans, we believe in building a financially stable future, one dollar at a time.
Published March 2024
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Reviewed by Executive Team Member at Auto Money
Auto Money offers over 80 locations across the Southeast for individuals seeking extra cash for last-minute expenses like auto repairs, wedding costs, medical bills, and more. As title loan lenders, we practice transparency and compliance with codes and regulatory statutes presented by the SC Department of Consumer Affairs & SC Board of Financial Institutions, Consumer Finance Division.