If you’re financially savvy, you likely know you should have a bit of money stashed away in your savings account for the future. The best way to quickly stockpile savings is to make extra money – and your savings account could help you do this.
If you place your money in a savings account at your local bank, you’ll earn barely any interest; the interest rates at traditional banks are very low, around 0.06 percent APY1. But you could earn hundreds of dollars more each year with high interest savings.
Here’s why you need to consider a high-interest savings account to save money much faster.
Higher Interest Equals More Money
If you open a savings account with an interest rate of just 0.01 percent, it will take you much longer to reach your financial goals2. For example, if you open a high-interest savings account, you can earn an interest rate of 1.80 percent APY – an interest rate that’s 180 times higher than the rates offered by most large banks. If you deposit $10,000 in a traditional savings account at a large bank that pays 0.01 percent APY, you’ll earn just $1 after a year. By contrast, that same $10,000 deposited in an account with 1.80 percent interest will earn $180 in one year.
High-Interest Savings Accounts are Flexible
High-interest savings accounts are better investment choices. Unlike CDs, which penalize you if you make a withdrawal before they mature, high-interest savings accounts allow you to make up to six withdrawals or transfers each month. You’re also able to open an account online (in just seconds!) and can access your information from your mobile phone or laptop 24/7. You can transfer money into your account electronically at any time, and you can link your new savings account to an existing checking account to transfer money as needed. Online savings accounts may function like regular savings accounts, but with many more perks.
It’s Easy to Make the Switch
Ready to open a high-yield savings account?
Start by researching the different offers available. There are numerous options available that pay more than 1 percent interest. Some of these accounts require no or very minimal opening deposits, but some may require you to keep a high minimum balance. After you’ve researched the different accounts and chosen one that meets your needs, you can open your account online by going to the online bank’s websites. Most of these websites allow you to apply online by completing a form. Once approved, you can then link it to your checking account and transfer funds.
If you’re trying to build up your savings, choose a high-yield savings account instead of a traditional savings account. When you open a high-interest savings account, you’ll be able to meet your savings goals much faster while still enjoying easy access to your money.
You can easily find out which accounts offer the best interest rates and fewest requirements with an online search. With an online search, you can compare local and national banks’ savings accounts, compare interest rates, and check for fees or special requirements, all without having to visit the bank in person. In fact, you can even open a new account online. So make sure to take the time to search for the right high-interest savings account for your money.
