High yield savings account is a one type of savings account as the name represents that gives more return to what you deposited or invested in your savings bank account. These accounts substantially offer higher interest than the national average. There are multiple banks offering high yield savings accounts like SoFi checking and savings, American express high yield express, CIT bank platinum savings and Ever bank performance savings.
Opening a high yield savings account is not a puzzle game, it requires a little time and documents. Suppose if you have a passport, driving licence or any photo identity documents either any one should be considered. Along with Name, Address, Email Id, Mobile number, Date of Birth and Social security number are necessary.
What is a High Yield Savings Account?
In simple High Yield Savings account is one type of savings account which offers higher interest rates compared to other traditional and existing accounts, making it grow your invested money faster.
Traditionally, people invest their money in savings accounts at the same bank where they hold checking accounts for easy transfer. Normally these accounts are offered by banks and credit unions to every individual to earn a competitive interest rate on their savings in order to earn a decent amount of passive income from their invested money. One of the fantastic tools for every account holder to shift from traditional savings account to High-yield savings accounts for those who are looking to grow their savings over time with minimal risk.
How to Open High Yield Savings Account
First of all, before opening a high yield savings account you should know whether the bank offers a competitive high yield savings account or not. If they offer it then it is a very easy one. It is very easy to open a new account with a little more information and you will be verified with the institutions.
If you open a savings account at a new institution, the process will be more involved and even simple. Normally most of the high yield savings accounts are opened online and you should fill an electronic application with key personal information. Like Passport, Driving Licence, social security number and primary bank account information etc.
Where to find a High Yield Savings account?
Normally you will find a high yield savings account offering the highest interest rates already having a bank. You can visit and compare different interest rates according to your convenience.
What are Factors should be considered before going to open a new High Yield Savings Account?
1. Research
It is an initial job to do some sort of research to find a perfect bank or credit union that offers high-yield savings accounts. Find which banks or credit unions that offer competitive interest rates and favorable terms according to your convenience.
2. Compare Interest Rates
It is a very crucial step in your Savings account. How much interest does the account currently pay? Whether they offer a standard rate or an introductory promotional rate?
Usually Interest rates are flexible in nature; it may vary depending upon the banks or financial situations. Some banks will specify that the currently advertised rate is only available for an initial period of time. Therefore it is very important to compare the interest rates offered by different financial institutions with which one you want to invest and make sure you’re getting the best possible return on your savings.
3. Required Initial requirements
How much is needed to open a High Yield Savings account? It is also a varying concept and differs from bank to bank. Keep in mind how much you want to deposit the minimum deposit requirements?
4. Minimum Balance Requirements
Please check if there are any minimum balance requirements associated with the high-yield savings account before going to open the account. Falling below the minimum deposit requirement can result in fees, which can offset the interest rate. In some banks accounts may require a minimum balance to earn the highest interest rate.
4. Fees
As we know, some banks or credit unions charge fees on savings accounts. It is very important to check whether any fees are associated with the account or not, like monthly maintenance fees or excessive withdrawal fees. Always look to avoid the fees in order to keep your balance above the minimum threshold. Look for accounts with minimal fees to maximize your savings.
5. Accessibility
Accessibility means how easily operate or access your account or funds like online banking or ATM. Normally High-yield savings accounts offer easy access to your money through online or mobile banking, but it is very important to check prior in advance before going to open your account to confirm accessibility options.
6. Deposit Options
Deposit option is nothing but that bank has a smartphone app that offers mobile check deposit? Otherwise you will be able to mail in checks or deposit them by ATM?
7. Safety
Safety is a vital point when it comes to your money and investment. Whether your money is safely protected or not is a big matter. Make some clarification that financial institutions offering the high-yield savings account are FDIC or NCUA insured to protect your funds up to the maximum limits.
8. Compounding Method
Compounding means banks compound interest daily, monthly, quarterly and half yearly and annually. More frequently your value compounds will automatically increase the profit or yields. Remember if you choose and compare accounts by APY instead of annual interest rates, the compounding factor will already have been taken into consideration.
The Bottom Line
One of the ideal choices for every long term investor to keep their money safe and easily accessible. It offers the highest interest rates for your saved amount compared to traditional savings accounts. In Spite of that it includes little or no risk because your deposits are federally insured up to $250000.
It is very important to study carefully what are the pros and bottlenecks of a high yield savings account before going to open it like an investment account. And compare with different accounts and find one which best suits your convenience and goals and situations.
