Why Should You Opt for High-Yield Saving Accounts?
You know all about savings accounts but do you know all about high-yield savings accounts? that can earn you 23 times the interest you may earn from a conventional bank savings account. Saving accounts recently have been experiencing declining popularity because of the low-interest rates. The usual bank can pay a measly 0.1 % on the savings balances.
For example, for a $10,000 balance, you can earn $10 in the first year. While on the other hand, a high-yield savings account can earn an APY of 2%. it will earn you a whopping $200 right in the first year itself. For the next five years, you can earn at least $990 more than a normal savings account. Now, you know why you should invest in a high-yielding savings account. Here’s what you need to know about three high-yield savings accounts.
The Safety of High-Yield Savings Accounts
Most people like to know where their money goes. When you walk to the local bank and ask the teller to take the money. However, you don’t know, what happens when you drive away. The process is the same in the local bank or an online bank. The only thing you lack in the online banking scenario is you don’t have to interact with the teller at an online bank, what you need to do is deposit the money electronically. Working on an online bank helps minimize the risk of human error to a great extent.
If you happen to choose an FDIC-insured bank (online), you need to be assured that your money will be safe at the online bank too. The FDIC insurance covers at least $250,000 in deposits per account holder, in each bank.
You Don’t Require to Maintain High Balances
There are some banks that require you to maintain high balances to earn high-interest rates, but there are so many banks that do not require you to keep a lot of money in your bank. There are banks like Vio bank that require just a $100 opening deposit/balance to earn its high annual percentage yield. (APY). When you keep larger balances you will earn more money in terms of interest compounds, but you do not require to avoid online savings accounts. Everyone requires one to begin somewhere. You can start saving as you find a reliable bank start with a low opening balance and save good money. You can also start with the easy process of keeping automatic deposits. You can keep increasing the balance thanks to the compound interest you earn.
You Can Withdraw Your Money Anytime You Want
Some people think when you keep your money in a bank online, it may be difficult to withdraw the money anytime you want. In fact, the opposite of the truth is true, you can get easy access to your money from an online bank. You can withdraw or transfer the money at least six times each month, so you can withdraw money a number of times thanks to FDIC. It may take a little more time to withdraw cash. If you do need to withdraw the money check your options a little more.
Keep in mind that it may take a little more time to withdraw cash, though. If withdrawals are important to you, research your options. There are a few banks that can offer access via ATM networks. As far as ATM networks are concerned, the Star and Pulse are regarded as the most common networks. Get in touch with the ATM network locator to withdraw the cash. If you find it difficult to get access to a nearby ATM, then consider transferring the funds electronically as you link to the external bank accounts.
After some time you may transfer the funds and receive them in the spate of the next 24 to 48 hours. Just a little planning ahead can get you the funds when you need them. You can withdraw cash at your nearby retail stores with the help of an ATM card, or wire transfers and you can initiate the withdrawals via phone or via email.
You Don’t Need to Pay a Service Fee for Online Savings Account
Most national banks require you to maintain a minimum balance in order to pay an extra service fee. However, as far as online savings accounts are concerned many people think that the fees may have to pay a higher interest rate, but that is usually not the case. Each of the online banks has its own set of rules but they usually do not charge extra monthly fees.
You may be missing out on the guaranteed earnings if you do not keep your money in the right savings account. Find out which works for you and put your money in the same.
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