High-Yield Savings Accounts Basics
This type of savings account offers a significantly higher interest rate than a traditional savings account.
What is a High-Yield Savings Account
One major advantage of high-yield savings accounts is that they are considered this type of investment, meaning they carry little to no financial risk.
What is low-risk (or safe)
When comparing high-yield savings accounts, looking at this key percentage rather than just the interest rate gives the best idea of how much you’ll earn annually.
What is APY (Annual Percentage Yield)
High-yield savings accounts are often offered by these types of banks, which have lower overhead costs and can pass savings on to customers.
What are online banks
Unlike long-term investments like stocks or real estate, a high-yield savings account allows you to access your money easily, a feature known as this.
What is liquidity
Before opening a high-yield savings account, you should check for these potential hidden costs, which could reduce the amount of interest you earn.
What are fees?
Compared to traditional savings accounts, high-yield savings accounts offer this key financial benefit, allowing your money to grow faster over time.
What is a higher interest rate
Unlike some other savings options, many high-yield savings accounts have little to none of these types of extra costs, making them an affordable choice.
What are monthly fees (or maintenance fees)
Some banks require a minimum deposit or ongoing balance to earn the highest interest rate. This requirement is known as this.
What is a minimum balance?
This term refers to the interest earned on both your original deposit and any previously earned interest, helping your savings grow exponentially.
What is compound interest
High-yield savings accounts help protect your money from this economic force, which reduces the purchasing power of cash over time.
What is inflation
A good high-yield savings account should offer this type of banking access, making it easy to check balances, transfer funds, and deposit money remotely.
What is online or mobile banking?
Most high-yield savings accounts are insured up to $250,000 by this federal agency for banks, or its equivalent for credit unions.
What is the FDIC (or NCUA for credit unions)
A key benefit of these accounts is their ability to allow savings to grow over time at a rate significantly higher than the national average, known as this percentage.
What is Annual Percentage Yield (APY)
The best high-yield savings accounts compound interest at this frequency, ensuring that your money grows as quickly as possible.
What is daily compounding?