SavingsAccounts

High Yield Savings Accounts

High yield savings accounts can help you build on your investment and earn you a larger APY (annual percentage yield) than a standard percentage rate savings account. With a few restrictions, you can begin drawing a higher yield on your savings as soon as you like. Many of the brick and mortar banks offer high yield savings accounts, or you can use an online bank.

If you're interested in opening a high yield savings account there are a few things to consider. The particular bank or credit union you want to maintain your business account savings may have certain regulations. There may also be fees involved. Such things as minimum deposit to your accounts, minimum balance, high fees and penalties for early withdrawal from these savings accounts, might make you think twice. High yield savings accounts are not for everyone.

Requirements for High Yield Savings Accounts

High yield savings accounts are often reserved for the premiere banking customers. They are considered a perk in some banks -a nod to your financial health. However, there are some online banks and credit unions that offer a higher yielding savings account to everyday patrons and members.

Many banks have a minimum deposit and it can be quite high, thus the high yield. There are some banks and credit unions who have no minimum deposit required, however, you may be charged a service charge, or maintenance fee, for maintaining the account if it drops below a minimum balance. These high fees can easily eat up all the interest you yield and then some.

Some banks and credit unions will ask that you, as a condition of the high yield, leave your deposit untouched, or don't make withdrawals for a certain period of time. If you do, you could wind up being penalized with hefty fees. In the event of an emergency that necessitates you withdraw some of your funds, you could be slapped with a penalty that could essentially eat up any yield you have earned.

Where to Open High Yield Savings Accounts

Traditional brick and mortar banks are still the most popular choice in banking. They have built their reputation on the idea of the benevolent banker. Good customer relationships remain a standard today.

Quite a few people prefer the tangible aspect of going into the bank, turning in a withdrawal or deposit slip directly to the teller, and having their money deposited into the secure hands of the bank.

The security factor is well and good, however, you probably won't get the highest yielding accounts at a traditional bank. In many cases, they have the more strict requirements for opening high yield savings accounts. You may not meet their criteria, and once you have, you may not get the best rates with a standard traditional bank.

A credit union can give you all of the stability and security of a bank. Credit unions are popular because of the ease of doing business with them. Once you become a member, you are able to apply for loans and open accounts pretty painlessly. Most everything is done right at the branch where you open your accounts. Because the overhead is low, credit unions will be able to offer you a slightly higher interest on savings accounts than traditional banks. They may not have the other requirements the banks do, such as minimum deposits and fees.

Because of their size, credit unions aren't always convenient. They tend to have few branches and the hours are limited. Some credit unions belong to a network along with other credit unions, which can help make transactions a little easier for you.

Online banks usually offer you the highest rates of return on your investment. They have practically no overhead, are open virtually 24 hours a day, and easily accessed from your computer. The online banks don't have many requirements at all and you can open an account, depending on the bank, with very little money. They do have their frustrations, however.

Many people don't care for the internet banking system, maybe feeling insecure about financial transactions taking place online. There's also the frustration of not having a "real person" to help you. Customer service can be touch and go and you're still dealing with computers, which can be a frustration in itself sometimes.

Before depositing your money, confirm that your online bank is insured through FDIC for up to 250,000.00. Traditional banks in this country are members of FDIC. Credit unions are insured through NCUA.

Choosing What's Right for You

Deciding to open high yield savings accounts is easy once you know the rules. If you find you have a sudden influx of cash and you won't be needing it anytime soon, why not put that money to work for you in any of the high yield savings accounts? You'll be happy with your investment.