What Are High Yield Interest Savings Accounts?
A high-yield interest savings account has been, and still remains, a significant way for individuals to earn from their money while keeping it saved at the same time. These accounts enable you to save your funds, earn from them, and also make them easily accessible when needed.
Whether you’re saving for future use, an important investment, or to gift someone, a high-yield interest savings account provides a suitable service for securing your money while also allowing it to grow.
In this article, we’ll elaborate on what high-yield interest savings accounts are all about, their key characteristics, and provide you with the top high-yield interest savings accounts to choose from.
What is a High Yield Interest Savings Account?
A high-yield interest savings account is a type of savings account that allows customers to earn a higher rate of interest (APY) on their deposited funds compared to a traditional savings account. These accounts enable you to grow your money at a fast pace while keeping it saved and easily available, allowing you to withdraw your money when needed.
Key Characteristics of High Yield Interest Savings Accounts:
– High Interest Rate (APY): The key feature of high-yield interest savings accounts is their ability to provide a high interest rate on deposited funds compared to traditional savings accounts. They offer competitive rates ranging from 1.50% to 4.00% APY, making them significantly different from traditional savings accounts.
– Liquidity: In addition to earning interest while your funds are saved, high-yield interest savings accounts also make your money easily accessible when needed, either through online transfers or ATM withdrawals. Since high-yield interest savings accounts are mostly offered by online banks or credit unions, online transfers are the most common method, making accessibility even easier. This means you can conduct transactions from the comfort of your home or office. With a bank that offers a mobile banking app, your money can be easily accessible from anywhere.
– Low or No Fees: Most high-yield interest savings accounts charge minimal fees or no fees at all for transactions, overdrafts, or maintenance.
– FDIC Insurance: High-yield savings accounts are insured by the Federal Deposit Insurance Corporation (FDIC), protecting deposits up to $250,000 for each depositor. This feature guarantees that your money is secure even if the bank suffers financial losses.
– Online Accessibility: High-yield interest savings accounts make it easier for customers to access their funds via online banking platforms and mobile apps.
What to Consider Before Choosing a High Yield Interest Savings Account:
There are several crucial elements to consider before choosing a high-yield interest savings account:
1. Interest Rate: Before opening a high-yield interest savings account with any bank or credit union, first understand their Annual Percentage Yield (APY) and how their interest is calculated—either daily or monthly.
2. Reputation and Security: Research the bank or credit union’s background, history, and stability before considering them. They must be insured by FDIC or NCUA, protecting deposits up to $250,000.
3. Minimum Balance Requirements: Many high-yield interest savings accounts have minimum balance requirements that must be maintained to earn the high interest rate. If you find a requirement that doesn’t suit you, look for another option.
4. Ratings: Check ratings and reviews from users before choosing any account.
5. Accessibility: Confirm how easily accessible your money will be, as some accounts may have limited withdrawals.
6. Charges/Fees: While some accounts have low or no fees, others may have high maintenance or transaction fees. Be sure to check fees before selecting a bank or credit union to avoid losing interest to overwhelming charges.
7. Bank Capability: Assess the bank’s capabilities for features such as a mobile banking app to facilitate online transfers. Healthy customer service should also be a priority.
5 Best High Yield Interest Savings Accounts:
Here are five top high-yield interest savings accounts to choose from:
1. EverBank Performance Savings Accounts: This account is among the top high-yield interest savings accounts, with the following great features:
– APY: 5.05%
– No minimum deposit/balance requirements to start earning.
– No monthly maintenance fee required.
– Interest compounded daily.
– Physical banking branches located in Florida.
2. LendingClub LevelUp Savings Accounts: They offer up to 5.30% APY, no minimum deposit requirements, and no monthly maintenance fees.
– Competitive APY (higher interest rate).
– No minimum deposit requirements.
– No monthly maintenance fee.
– Interest compounded daily.
– Live chat support for customers.
3. Laurel Road High Yield Savings: This high-yield interest savings account offers excellent services for anyone considering an account.
– APY: 5.00%
– No minimum deposit requirements.
– No monthly maintenance fee required.
– Interest compounded daily.
– Direct communication channel with customers.
4. Quontic Bank High Yield Savings: Known for its notable customer service, this account has low deposit requirements and no monthly maintenance fees.
– APY: 4.50%
– Low minimum deposit of $100 to start earning interest.
– No monthly maintenance fee.
– Interest compounded daily.
– Live chat support for customers.
5. Ivy Bank High-Yield Interest Savings Accounts: This account is also ranked among the top high-yield interest savings accounts.
– APY: 5.30%
– Low minimum requirement of $2,500 to start earning.
– No monthly maintenance fee required.
– Interest calculated daily.
– Live chat support for customers.
The most important features to consider when choosing a high-yield interest savings account are the monthly maintenance fee and customer support. These transaction fees can take a significant portion of the interest earned, so look for accounts with low or no maintenance fees.
Good luck with your savings and happy earning!
