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What to look for when opening a high-yield savings account

If you're looking for the best high-yield savings account available then be sure to check for fees. Westend61/Getty Images

Savings can help you prepare for the unexpected or for an upcoming financial goal — and you can maximize your savings over time with the right account.

If you're still saving in a traditional bank account with near-zero interest rates, it might be time to upgrade to a high-yield savings account. These accounts can help you add more money by earning interest on your balance. 

And with today's competitive interest rates, it's a better time than usual to get started. According to data from the FDIC, the national average savings account rate (which includes many traditional savings accounts with large banks) is currently around 0.37% APY, while many high-yield savings accounts today offer close to or above 4% APY.

Before you start saving, you'll want to make sure the savings account you choose best sets you up for success.

Explore available high-yield savings interest rates today.

3 things to look for in a high-yield savings account

Like with any deposit account, the first thing you should do when considering a new high-yield savings account is to make sure the bank you choose is FDIC-insured. This will protect you in case of bank failure (up to limits) so you don't have to worry about the safety of your money.

After that, look for these three account details to find and open the right account for you.

A great interest rate 

The biggest benefit of a high-yield savings account is the interest you can rack up on your balance — so one of the most important factors you should consider is what interest rate the account offers.

High-yield savings rates are variable, which means the rate you open your account with today will change over time, and go up or down depending on federal interest rate moves. But if the account you choose has a competitive rate today, there's a good chance that it will remain competitive among other banks over time.

Today, the best high-yield savings rates are around 4% APY or more, with some even reaching as high as 5% APY. Depending on how much money you deposit, interest that high could make a big difference in your savings balance over the course of a year or longer.

Learn more about the best savings account rates available now.

No fees

Interest earnings help to boost your savings balance, but if you choose an account with high potential fees, you could quickly start to cut into the amount you have saved.

Common fees include charges for making more than the allotted number of withdrawals each month, wire fees for outgoing or incoming transfers, paper statement fees, charges for leaving your account inactive and more.

In some cases, your account may come with these fees but the bank will offer options for you to waive them. For example, opting into online-only statements is a common way to avoid potential paper statement fees.

Before you open any new account, read the account terms and conditions for a full overview of potential fees and how to avoid them. You can often find this document on the bank's website.

Low or no minimum balance requirements

Savings accounts help you keep an existing balance secure, but you can also use them to start building savings from scratch. 

If you don't already have a lot of money in savings, check whether the high-yield savings account you choose requires a minimum balance. Some accounts may require you to deposit a minimum amount upon opening, while others may require you to maintain that amount over time.

Even if you do already have enough money saved to meet the minimum, it could become an issue later. If you need to withdraw a large chunk to pay an unexpected expense, for example, you don't want to be stuck paying a fee for not maintaining the required minimum balance. 

The bottom line 

There are plenty of high-yield savings accounts on the market to choose from, but that doesn't mean you should get overwhelmed with your options. Make sure the account covers these three criteria — a competitive interest rate, no fees that will take away from your earnings and no minimum requirements — as well as FDIC insurance. 

Then, compare today's best high-yield savings accounts and start saving today to kickstart your balance.

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