Open a high-yield savings account
This week's bingo blog is to consider opening a high-yield savings account.
What is a high-yield savings account?
High-yield savings accounts are a useful vehicle for short-term savings. High-yield savings accounts are Federal Deposit Insurance Corporation (FDIC) insured so you have a guaranteed return on your money so long as it's under $250,000. If you want to be able to access your money quickly and reliably you will be able to do so.
What are the benefits?
High-yield savings accounts earn higher interest than most basic checking and savings accounts; hence the term "high-yield". The average savings account in the US has a .42% Annual Percentage Yield (APY) and switching to a high yield savings account could help you grow your money much quicker. The current average rate of a high-yield savings account is about 4%; that's a 10 times savings earning on your cash investment! Note: these rates vary and fluctuate depending on market circumstances.
What kinds of savings are well-suited to high-yield accounts?
A high-yield savings account is useful if you know you may need to access these funds soon, but you aren't sure exactly when. For instance, let's say you are actively looking for a new home and may move at any point; these savings may benefit from a high-yield savings account. Similarly, Emergency Funds are an excellent example of funds well-suited to a high-yield savings account. In the event of an emergency, you want to be able to access your savings quickly and easily.
By opening a high-yield savings account, not only will you separate out the funds accordingly, but you'll earn higher interest than if you left them in your regular savings or checking bank accounts.
Which accounts do you recommend?
Check out my resource section for specific recommendations and breakdowns.
Let me know how it goes! Do you have a high-yield savings account already? What do you use it for? You can shoot me an email at hello@financesforfeminsts.com or send me a DM. Well done on another bingo square completed!
