High Yield Savings
High yield savings refers to savings accounts which earn higher than average annual percentage yield. APY is refers to the amount of money earned against deposited funds. In order to obtain the highest APY, individuals should seek out banks or credit unions which compound interest daily. Many financial institutions compound interest on a quarterly basis, so it is important to shop around.
The Internet is a great source for locating high yield savings accounts. One of the most trusted sources for locating banking information, savings calculators and high interest savings accounts is BankRate.com. Visitors can compare interest rates, minimum deposit requirements for opening a savings account, monthly service fees and minimum balance requirements.
Another high yield savings comparison website is ConsumerSearch.com; a service presented by About.com which is part of the New York Times Company. ConsumerSearch includes a wealth of information about each savings account provider.
Visitors concerned with online banking security risks can locate physical addresses for banks offering high yield savings accounts. Individuals who prefer to conduct banking business online can easily locate web addresses for both traditional and internet-only banks.
When searching for the best high interest savings account providers, it is important to work with financial institutions that are FDIC insured. FDIC stands for Federal Deposit Insurance Corporation; an independent agency created through Congress.
Individuals who deposit funds into checking, savings, money market accounts or certificates of deposit (CDs) receive insurance coverage up to $250,000 to protect assets in the event the bank fails. Considering the multitude of bank failures in recent years, it has never been more important to work with banks insured through FDIC.
Funds deposited at credit unions are not protected under FDIC. Instead, credit unions are backed by the insurance fund of National Credit Union Share Insurance Fund (NCUSIF). This insurance fund is managed by the National Credit Union Association and offers up to $100,000 of protection per depositor and $250,000 for retirement savings accounts.
Individuals who are trying to pay off credit cards and want to avoid using them should consider opening a high yield savings account through SmartyPig. This online savings plan is offered in partnership with West Bank and is designed to help depositors save money to be used for big ticket purchases.
In 2009, SmartyPig received rave reviews from Forbes and American Banking News. What's unique about SmartyPig is not only do they offer high interest savings; depositors can set up multiple goals to contribute a set amount of money to fund various projects. Consumers can establish a vacation savings account, set aside money for a new car purchase and open an account for a kitchen remodel or major appliances purchase.
Another unique feature of SmartyPig is friends and family can contribute funds into depositors' online savings account to help them reach their financial goals. Details of this savings program can be found at SmartyPig.com.
Regardless of your savings desires, always check bank ratings at BankRate.com before opening an account. Look for banks with a minimum 3-star rating. Also check the rates and fees associated with each type of high yield savings account. Some banks offer higher rates of interest when accounts are opened online vs. in-house. Others include hidden fees such as charging for paper statements or use of ATM machines.
By taking time to conduct research, you can increase your savings and have peace of mind that your money is in safe hands. Learn more about high yield savings account and investing strategies in our personal money management article library. Subscribe to our mailing list to receive notification when new money-saving tips are published.