What to look for in a High Yield Savings Account
Opening a High Yield Savings Account is one way to make your money work a little smarter for you. For one, it’s a great way to grow your savings. Many traditional bank accounts have laughable APY’s (annual percentage yield) like .02%. You deserve more than that for your savings account. Before opening an account, here is what to look for in a high yield savings account.
High APY (Annual Percentage Yield)
The first expectation of a high yield savings account is that it offers a high APY (Annual Percentage Yield). If it doesn’t, consider looking into another bank that offers a higher APY. Do your research and check out different online banks to compare APY. Also, make sure that you are reading the conditions.
Some banks have limitations to their APY’s. For example, a bank may offer 2% APY on a high yield savings account but only up to the first $500, then after the APY drops to .02%. These types of accounts may not be the best choice if you have large amounts of savings where you can earn a higher yield on the entire amount. .
No Fees
The sole reason I switched from a traditional bank account to an online high yield savings account was to avoid paying fees. There is no reason you should have to pay a fee with online banks. If there is a fee for monthly maintenance or ATM withdrawals that are not reimbursed, then it may not be the best option. The bank I use reimburse all my ATM fees when I withdrawal money at the end of the month.
Easy Transfers
Since most high-yield savings accounts are offered at a bank that is primarily online, money transfers between your accounts should be painless, fast, and free. I use my high-yield savings account to save money. In the case of an emergency, I should be able to access the money from my high-yield savings account quickly. Make sure that transferring money from your high-yield savings account to other outside banks is free and fast. You should not have to pay to access your money.
No minimum deposits
I don’t appreciate the idea of a minimum balance requirement on bank accounts. Although it would be ideal to never have to dip into savings, life happens, and sometimes you may be faced with an emergency. It would be unfortunate to withdraw your money from a savings account that has a minimum balance, and then be met with a fee because you dipped below the minimum requirement. For this reason, I like high yield savings account that have no minimum balance requirements.
FDIC insured
Reputable banks are FDIC insured. If you’re going to put your money anywhere, first make sure that it is insured. It makes no sense to work hard to save money only to put your money away into an bank that does not protect or ensure your money.
User Friendly App
Lastly, since most high yield savings accounts are online, I expect their app to be user friendly. If a banking app is known for having glitches, I don’t like to waste my time with these banks.
What are the most important things that you look for in a high yield savings account?
