Being a student in today’s climate is an expensive task. From tuition fees to daily expenses, students have to pour in a lot of money for their education before getting around to reaping the benefits. Students nowadays have become quite financially savvy to help foot the costs they incur while at university. Keeping your money in the bank is one of the oldest ways of increasing your savings but lately, students have started putting their money in a high yield savings account to help multiply their funds in a shorter time frame.
Before we get around to listing the best accounts in the market, let us better understand what these accounts are and what are some of their benefits.
What Is A High Yield Savings Account?
As opposed to a regular savings account, a high yield account helps earn a larger annual percentage yield (APY) while the account owner enjoys the security of the former. This gives account holders the chance to earn more on their savings. The main feature of a high yield account is that many times the annual percentage yield is variable and is subject to change.
High yield accounts use the calculation of compound interest to help one’s money grow. To explain it using simpler terms, your money in the savings account earns interest, and then that interest which is credited on either a monthly or quarterly basis earns interest. This is how one’s money increases in a high yield savings account.
Benefits Of This Account
The pros of a high yield account outweigh its cons as well as the pros of a traditional savings account. Let us take a look at some of the benefits of the best high yield accounts.
- The interest rate in a regular savings account is 0.06% while the interest rate in a high yield account hovers at 1%.
- A high yield account is perfect for emergency funds or if you are looking to build short term savings. As it is computed using compound interest, you are essentially earning interest on your money daily. So if you are looking to make some money while you are pressed for time, stashing your cash in a high yield account is the ideal choice.
- So many deposit accounts make you wait for your money to mature and then make your funds accessible to you. There’s no such problem when it comes to a high yield savings account. You are free to tap into your account when need be.
- The majority of accounts come with monthly fees or minimum balance amount constraints. There’s no such issue with high yield accounts where there are no amounts or fees you need to incur while putting your money in one.
- Mobile banking apps make it very easy for your to manage and keep track of your high yield accounts. You can access your account and its details from the comfort of your own home or from anywhere in the world.
- High yield accounts enable the account owners to transfer their money between accounts just like in other accounts, without any hassles.
Popular High Yield Savings Accounts
The market is cluttered with high yield accounts. The best high yield accounts for newcomers especially, students are listed below.
Quontic Bank High Yield Savings – Offering an annual percentage yield of 1.01%, Quontic Bank’s high yield savings account is among the best in the market. To top it off, there are no extra charges or fees with minimal minimum deposit requirements.
Synchrony Bank High Yield Savings – Synchrony Bank’s high yield account offers an annual percentage yield of 0.85%. True to the benefits of a high yield account, it does not charge any fees, extra costs or minimum balance requirements.
Salem Five Direct eOne Savings – Salem Five’s Direct eOne Savings offers an annual percentage yield of 1.01% and like the above high yield accounts, the account holder does not incur any extra costs or fees. It is known to offer competitive yields.
Bread Savings High Yield Savings – Looking for a higher than average savings rate? Formerly known as Comenity Direct, Bread Savings’ high yield account offers an annual percentage yield of 1% once again, with no fees or extra charges.
Lending Club Bank High Yield Savings – Perfect for small-business owners looking for financing and customers looking to switch to an online managed high yield account should have Lending Club Bank at the top of their list. It offers an annual percentage return of 0.85% with no minimum balance requirements.
If you found this blog on “Why You Should Switch To A High Yield Savings Account” an informative read, make sure to give out other blogs a read:
- Six Incredible Advantages Of An Education Loan
- Do Student Loans Count As Income? Here’s All You Need To Know
- Proven Tips To Secure A Graduate Subsidized Loan For School
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