Interest rates have climbed much higher. Are you taking advantage of that?
If you listen to the news every day you have been hearing about inflation and higher interest rates for months. If you have balances on your credit cards or are trying to buy a home or car you have seen the interest rates on those loans sky rocket. At the same time interest rates on regular savings accounts have stayed under 1% and investing in the stock market has been risky. Many have lost around 20% of their pre-pandemic savings. This would be in retirement accounts like 401k’s, IRA’s and individual stocks.
So, what can you do to increase your savings in this economy?
Fortunately, there are some ways to still safely grow your money. Let’s talk about high yield savings accounts. With rates at 15-year highs, you could earn way more interest than the average savings account.
What is a high-yield savings account?
high-yield savings account is an interest-earning account typically offered by online banks and credit unions that offers a substantially higher interest rate than you’d find with a traditional savings account, so you can earn more than an average savings account and still have access to your money.
What is a high-yield savings account?
high-yield savings account functions like any other savings account – albeit with much higher interest rates. When you deposit money in a savings account, the bank pays you compound interest to keep your money parked there. When you earn interest during one period, the bank deposits that money into your account. Then the next period, your account earns interest on your new account balance and the growth snowballs over time. The rate of compound interest your account earns over a year is expressed as the annual percentage yield, or APY. 
The biggest advantage of a high-yield savings account is the rate at which interest accrues. This can allow you to grow your savings and achieve financial goals much faster.
Currently, the national average interest rate for savings accounts is 0.35% APY, according to the Federal Deposit Insurance Corporation (FDIC). By contrast, a competitive high-yield savings account might pay 3.50% APY or higher, 10 times more than your regular bank savings account or more. So, you have the potential to really grow your savings.
How to choose a high-yield savings account
There are a few essential factors to consider when choosing the best high-yield savings account, including:
  • Interest rate: While the interest on the average traditional savings account is 0.33%, some brick-and-mortar banks are still offering even lower APRs. You may be able to find high-yield savings account offers online with interest rates ranging from 3.50% or higher.
  • Fees: Most banks charge fees when you withdraw from your savings account more than six times. As long as you don’t do anything unusual, like withdraw more money than you have in your account, you shouldn’t have to pay any fees but check to see how many withdrawals the bank allows.
  • Minimum balance: Depending on the bank, you may earn the stated APY only by meeting a specific minimum balance threshold, or you could earn the same APY regardless of your balance.
  • Compounding frequency: Banks may compound interest daily, weekly, semi-annually or annually. Theoretically, the more frequently interest compounds, the faster your money will grow.
  • Access: Any savings account you’re considering should be able to link to any external accounts you have free of charge so you can deposit funds easily.
  • Secure: FDIC-insured banks protect your savings account funds up to the legal limit, currently $250,000 worth of protection per account holder.
If you aren’t currently in a position where you can save any money please get in touch. I can help you find ways of increasing your savings even if it looks like there is never any money left at the end of the month.
We all tend to think wealth is created by working hard and that we make the most money through our jobs. The truth is though most wealthy people got there by saving money and investing it.
Wouldn’t it be great to have your money making money for you instead of always having to put more hours in at work? 
I can help you set things up so you will have the money to realize your dreams. Please get in touch. I’m happy to answer any questions you have.
Take Action!
To find banks and credit unions offering high yield savings accounts just google “today’s interest rates for high yield savings accounts” or check on Nerdwallet.com. Then transfer the money in your current savings account to the best bank offer for a high yield savings account you found in your search. Then watch your money grow.