CASH IS KING: The Best Spots To Earn More With Your Saving
Nick Covyeau, CFP?
I help families over Age 55 simplify their investments, lower taxes, and retire sooner
Gone are the days of it being acceptable for your big bank to get away with paying you 0.01% on your hard-earned money.
After all,?you?deserve?better.
Finding the right savings account can mean the difference of quite literally hundreds if not thousands of dollars each year.
Don't believe me?
Look no further than a?High Yield Savings Account.
And if you happened to read?last week's Newsletter, the answer is 'Yes', these High Yield Savings account options that we're about to discuss are all?FDIC Insured.
What is a High-Yield Savings Account?
A high-yield savings account is a type of savings that you can open at just about any bank or credit union. But it differs from a traditional savings account in that it offers interest rates (APY) that are much higher than the national average.
It's also different from a CD in that your money is always 100% liquid and accessible without penalty.
In other words, you don't have to lock your money up for 12, 18, or 24 months to get compensated at higher interest rates.
High-yield savings accounts have many of the same features as any regular savings, including:
How much do High Yield Savings accounts pay?
High-yield savings accounts?on average?pay more than 10 times?the national saving average.
According to?CBS News, the average interest rate for traditional savings accounts is currently 0.33%, while the average rate for high-yield accounts is 3.5% to 4.5% or higher.
That's roughly 11 to 14 times more.
That figure is even higher among Big Banks as the Savings Interest Rate at?Chase is 0.01%?as of this morning.
If you put $10,000 into a traditional savings account, after one year, you’d have earned $33 in interest.
... And at Chase Bank, that number would be $1.
However, if you decided to put that same $10,000 into a High-yield savings account earning 4.88%, you would have made $488 in interest throughout this past year.
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Just imagine what those figures would look like if you had $100,000 or more sitting around in savings!
I know, seems too good to be true, but I can assure you it's legitimate.
In fact, because of the FDIC Insurance mark, all of this money grows entirely risk-free.
So why don't the 'Big Banks' offer High-yield savings accounts?
The honest answer is that?they don't need any new money?or customers and therefore aren't motivated to keep up or pay those higher rates.
What does this mean for Savers?
When you're searching for the most attractive High-yield savings account, a lot of the institutions competing for your money and business will more than likely be smaller banks or operate mainly online without a brick-and-mortar presence.
??CONSIDER THIS:?Try having two banks.
Many consumers do their day-to-day banking at Big Bank or Credit Unions with a local presence that they trust and know and can walk into to make deposits and speak with a teller.
That said, any money that is above and beyond their Checking account and Emergency Savings of 3-6 months' worth of living expenses, they put to work at an online Institution that offers a High-yield savings account that is FDIC Insured and Guaranteed.
Where could a High-Yield Savings account make sense?
Every dollar you've saved should have a purpose.
And when it comes to your banking, it should be no different.
High-yield savings accounts, when used correctly, can have a powerful impact on one's financial plan.
High-yield savings accounts are great for:
High-yield savings accounts are NOT designed for:
How to Evaluate High-Yield Savings Accounts & Institutions
All things equal, including the very important FDIC stamp of approval, you may want to consider going with an Institution that you're familiar with and has solid online reputable and reviews, rather than chasing higher interest rates at Institutions you've never heard of before.
Take a look at these Independent websites that list and evaluate various Institutions to see how your extra savings could grow:
Thought leadership for niched finance pros | Finance Copywriter | Finance Marketing Strategist | ?? Host of The Finance Marketing Podcast
1 年This is such a crazy simple move, really makes me wonder why more people don't do it! I also wonder if brick-and-mortar savings accounts are going to become obsolete in the next 10 years or so? ??
I help physicians and business owners save taxes, retire early, reduce portfolio fees, take their bucket list trips, and increase their retirement spending.
1 年Tides are swinging back to savers being rewarded.