4 ways to boost your earnings with a high-yield savings account
Savings are a crucial part of any financial plan. Without them, you could struggle to cover large or unexpected expenses, forcing you to take on debt that can set you back for years.
The more savings you have, the better prepared you are. And one easy way to grow your savings is by opening a high-yield savings account. These accounts can earn anywhere from 10% to 15% more interest than regular savings accounts while offering you the same perks, such as FDIC insurance and ready access to your funds.
"A high-yield savings account is worth opening because it will have a higher interest rate than a traditional savings account," says Kristen Beckstead, CFP, ChFC, vice president and financial planner at First Horizon Advisors. "This allows your money to work harder and grow faster while your funds remain completely liquid and accessible."
High-yield accounts automatically earn you more, but you can maximize those earnings by taking a few simple steps.
How to boost your earnings with a high-yield savings account
By choosing a high-yield savings account over a regular one, you're already ahead of the game. Here's how you can get even further:
1. Shop around
Not all high-yield savings accounts are created equal. While they offer better interest rates than traditional savings accounts, some offer higher rates than others. So don't settle for the first account you come across. Compare current offerings based on interest rates, fees and other terms and conditions. You can get started here.
2. Avoid fees
Some high-yield savings accounts require a minimum balance; if you fail to maintain that balance, you may be subject to fees. Others charge fees for excessive withdrawals. This can eat into your earnings. To save more of your money, take a look at accounts with no fees, and read the fine print carefully before opening an account with a select lender.
3. Automate your savings
One of the easiest ways to save more is to make it automatic. Set up an automatic transfer from your checking account to your high-yield savings account each month, preferably when your paycheck hits. This way, you won't have to think about saving and you'll be less likely to spend the money you intended to save.
Check out today's savings account rates to find out how much more you could be earning!
4. Bank any windfalls you receive
When you receive unexpected money, such as a tax refund or bonus, put it directly into your savings. You won't miss it in your budget since you weren't accounting for it to begin with, and this way, the extra money can earn interest until you truly need it.
The bottom line
If your savings aren't in a high-yield account, you're essentially missing out on free money. That said, putting them in a high-yield account isn't the only thing you can do to maximize them. By carefully comparing different accounts, avoiding fees, automating your savings and banking any windfalls, you set yourself up to earn more. None of these steps take a significant amount of time, and they can really pay off in the long run.
