High yield savings accounts are not just for millionaires

When you read ‘high yield savings account’, you might dismiss it as something just for millionaires. But this is not true. Whether you’re saving for a holiday, a house, a car, or need somewhere to store your emergency fund, a high yield savings account is the best way for anyone to make their money go further.

You probably already have a savings account. If it’s with your local brick-and-mortar bank, chances are you are earning around 0.06% interest. But what if I told you that you could earn many times that amount? This is what many high yield savings accounts offer and one of the many reasons so many are moving their hard-earned money to one. 

How is this possible?

Traditional brick-and-mortar banks often have high operational costs – rent, staff, keeping the lights on. Online banks and financial services have cut many of these costs. Some financial services only offer high yield savings accounts, rather than the multitude of services offered by your usual bank. This streamlining allows them to focus their costs and energy on one product and, as a result, offer much higher interest rates.

Is it safe?

The safety of your money is vital when choosing a savings account. That’s why many of us must ask: are high yield savings accounts safe? Are online banks safe? The answer is that high yield savings accounts are incredibly safe with little to no risk, so you can rest assured that your money is secure, unlike other riskier investments, such as the stock market.

Is it easy?

Finding and getting a high yield savings account is easier than ever. There was a time when comparing savings account and opening a new one involved lots of phone calls and forms. But in this digital age, we’re all a few clicks away from opening a high yield savings account. On top of that, online banking makes withdrawing your money much easier. Most high yield savings accounts don’t offer ATM withdrawals, but what they do offer is streamlined online withdrawals. If you want to open a high yield savings account, then simply shop around, compare interest rates, and check the fine print, and you’re good to go!

What’s the catch?

Put simply, there isn’t one. Lots of us assume that high yield savings accounts have high maintenance fees and minimum balances or that we won’t be able to withdraw money when we need it. But online banks and financial services are often more streamlined than traditional banks. Many offer low initial deposit requirements, low minimum balances, and low to zero maintenance fees. So you don’t need to be rich to open a high yield savings account.

You can make your money go further with a high yield savings account. Online banking and digital financial services are making this easier and more worthwhile for savers every year. My advice? Take your time, compare rates and offers, and keep in mind how much you want to save and what you’ll use it for.