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With high yield savings accounts, your savings grow quicker, helping you avoid high interest rates that come with some credit cards. Having sufficient savings is important in case of medical emergencies, car repairs, home repairs and improvements, job retraining, college for the children, and many more. When you look for a high yield savings account, you should take a number of factors into account. These are quality of service, penalties that apply, preferred method of access, and how much will the bank pay you for parking your money into the account.
But what exactly is a High Yield Savings Account? How does that differ from other types of accounts? The term “high-yield” just means it is a competitive savings account, and if you subscribe to it, you can watch your money grow. These accounts offer a variety of benefits. A better way of saying high-yield is high annual percentage yield. Sometimes, though, banks and their clients have different views on what high percentage yield is.
Before we begin to broach the issue of diverging viewpoints, it should be pointed out that banks usually offer high yield savings accounts to certain clients only. You need to have a substantial initial deposit, limit
Of course, there are exceptions, and Internet bank accounts are one of these. These accounts offer high yield even with minimum deposits. The catch is that you have to handle a larger number of responsibilities yourself, such as managing transfers, linking accounts, and using the Internet. If you are comfortable with online banking, this is a great way to find such accounts. There are usually fewer limitations this way. If you are the more traditional type, just ask at the local bank or your credit union. Ask what prerequisites you must meet to get a higher rate than your current one. If your bank does not have anything to offer you, then, as you may guess, it is back to the Internet. You could also make calls here and there. Most banks have new account managers’ numbers listed on their websites.
In Canada, some financial institutions that offer high-yield accounts are Ultima Bank, Washington Savings Bank, The Dollar Bank Federal Savings Bank, Palladian Private, Gogebig Range Bank, and many more. Ultima offers the Smart savings account for people 18 years of age or less. The yield is 2.02 percent, which beats the competition by far. However, withdrawing funds before you turn 18 will carry a penalty. The Dollar bank offers a 2 percent yield. Washington Savings offers 1.51 percent for balances ranging from $10 to $15,000. This applies to online accounts exclusively. The checking account must feature a minimum of five debit card transactions per month. The Palladian Private Bank offers a yield of 1.50 percent, but only current customers are eligible. Accounts can be opened online, and there is an option to fund them from another online account. The SmartyPig (yes, there is such an establishment) offers a yield of 1.35 percent. Your minimum deposit should be $25.