High Yield Savings Accounts

By Clayton | The Outcome Is Income | 5 Apr 2022


Recently my sister reached out to me with questions about other places to put some money other than her normal checking account. After determining what she wanted it for, we decided to open a checking/savings account that provides a higher interest rate.

What Are High-Yield Savings Accounts

More often than not most people have held their savings and checking accounts in the same place because of the ease of transferring money back and forth. Because online banking has exploded, the competition has driven up interest rates. In order to achieve these higher rates, the institutions that have high-yield accounts may not offer all your banking needs or they have limited features. This means you may have to have money in multiple locations. Electronic transfers are readily available making this less of a hassle but it still can feel cumbersome at times.

Because they earn 20-25 times the average savings rate, they are perfect for emergency funds and/or savings goals that are further down the road. Check out my post How I Manage My Money to see more about where you can place money and how to determine where it should go.

Some Options

A few things to look for when choosing an account are interest rate, required initial deposit, minimum balance required, fees, accessing your money, linking between banks, deposit options, and compounding method.

Some of the best choices we were able to find are:

  • Marcus by Goldman Sachs

    • APY: 0.50%

    • No Minimum Deposit

    • No Fees

    • Same-day transfers

    • No Checking Account

    • No ATM card

  • Synchrony

    • APY: 0.50%

    • No Minimum Balance

    • No Monthly Fee

    • No Checking Account

    • Offers ATM card

  • Varo

    • APY: Begins with 0.20% but can get 3.00% with requirements

    • No monthly fee

    • No Minimum Balance

    • Offers Checking Account

    • Offers ATM card

  • Ally

    • APY: 0.50%

    • No Minimum Balance

    • No Monthly Fee

    • Offers Checking Account

    • Offers ATM card

Bottom Line

High-yield savings accounts are great for emergency funds because they have higher interest rates while maintaining liquidity. There are many great options out there and thanks to the internet they are easy to find. A great place to start is with online banks.

DISCLOSURES

INSURANCE AND INVESTMENT PRODUCTS: NOT A DEPOSIT. NOT FDIC/NCUA INSURED. NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY. NOT GUARANTEED BY ANY BANK OR CREDIT UNION. MAY LOSE VALUE.

PROVIDED CONTENT IS FOR OVERVIEW AND INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED AS TAX, LEGAL, FIDUCIARY, OR INVESTMENT ADVICE.

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Clayton
Clayton

A weekly newsletter that is designed to help make sense of your financial world. My goal is to help others achieve financial freedom as efficiently as possible. Topics discussed range from saving and budgeting to investing and taxes.


The Outcome Is Income
The Outcome Is Income

A weekly newsletter that is designed to help make sense of your financial world. My goal is to help others achieve financial freedom as efficiently as possible. Topics discussed range from saving and budgeting to investing and taxes. I want to keep these posts simple and inciteful because I believe small things can lead to magnificent changes.

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