Goldman appeals to the masses
Want to see your money grow?
A high-yield savings account can help your money grow with very little effort.
High-yield savings accounts offer higher interest rates than traditional savings accounts. As soon as you deposit money into a high-yield savings account, you’ll see how much extra cash you can earn in interest and wish you’d started sooner.
Where should you keep your savings? A safe and financially advantageous place to save is in a high-yield savings account. (iStock/iStock)
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But it’s not too late: Here’s everything you need to know about high-yield savings accounts and how to open one today.
- How do high-yield savings accounts work?
- Which banks have the highest yield savings accounts?
- What should you look out for when choosing a high-yield savings account?
- How do I open a high-yield savings account?
- What’s the best way to use a high-yield savings account?
1. How do high-yield savings accounts work?
High-yield savings accounts offer higher interest rates than traditional savings accounts.
Typically, high-yield savings accounts offer interest rates of around 5%.
Banks pay you interest on the money you deposit in your account. The interest is usually paid monthly or quarterly, and it’s easy to see how much interest your account has accumulated.
These accounts are different from Certificate of Deposit (CD) accounts because you must deposit a set amount of funds for a set period of time.
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In most cases, money in a high-yield savings account can be accessed without penalty, but there are often monthly withdrawal limits.
2. Which bank has the highest yield savings account?
Bank interest rates on high-yield savings accounts fluctuate, so it’s important to keep an eye on your account and interest rate.
That being said, there are some banks that can be favorable choices for having a high-yield savings account.
Many banks, including Goldman Sachs’ Marcus, offer competitive interest rates on high-yield savings accounts. (Rafael Enrique/SOPA Images/LightRocket via Getty Images / Getty Images)
Examples include Goldman Sachs Marcus, Ally Bank, Barclays, SoFi and Capital One.
All of these banks offer high-yield savings accounts that don’t require a minimum balance.
Marcus by Goldman Sachs, Barclays, SoFi and Capital One all have no monthly fees on their high-yield savings accounts. Ally Bank charges a $15 expedited shipping fee, a $20 domestic transfer fee and a $25 hourly account audit fee.
The interest rates on these banks’ high-yield savings accounts may vary, but at the time of writing, here are the annual percentage yields (APYs) associated with each account:
- Goldman Sachs’ Marcus – 4.40%
- Ally Bank – 4.20%
- Barclays – 4.35%
- Sophie – 4.60%
- Capital One – 4.25%
3. What should I look out for when choosing a high-yield savings account?
When searching for a high-yield savings account, one of the most important factors to consider is the interest rate, making sure you’re getting the most for your money.
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You should also check whether the account requires a minimum balance. There are plenty of high-yield savings accounts that don’t require a minimum balance, which is an advantage because you won’t have to stress over having to withdraw money when you need it.
Additionally, consider fees – ideally, you’ll want to choose an account that doesn’t charge fees.
Many high-yield savings accounts are opened through online banks. If so, you’ll want to make sure the bank offers good customer service in case you have questions while you hold the account. Find out what communication options are available to you for peace of mind.
Finally, make sure the bank you open your high-yield savings account with is FDIC insured, which protects up to $250,000 per person per account.
4. How do I open a high-yield savings account?
Opening a high-yield savings account is super easy. If everything goes well, it should only take a few minutes to get started.
Once you have selected the bank where you want to open a high-yield savings account, go to the bank’s website and fill in all the required details.
Opening a high-yield savings account is super easy – you can do it right from your computer without ever leaving your home. (iStock/iStock)
Once your information is approved, you can begin depositing funds into your account through your checking account.
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When you first open an account, deposit a small amount to ensure that everything is working properly.
5. What is the best way to use a high-yield savings account?
Set up automatic transfers to a high-yield savings account. This means that a predetermined amount of money of your choosing will be automatically moved from your checking account to your high-yield savings account on a schedule you choose. This is a great way to help your money grow without you having to think about it.
Remember, just because you have automatic transfers set up doesn’t mean you can’t put in extra money when you have it.
Many high-yield savings accounts allow you to open multiple accounts in your name, so take advantage of this tool if you have multiple savings goals.
For example, one category could be “future home,” another “emergency fund,” and a third “vacations” or even a category called “wedding.”
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High-yield savings accounts are great for both long-term and short-term financial goals, and creating different “buckets” for each goal will give you a clear picture of how much you’ve saved in each specific category, rather than lumping all your savings into one.
