There are many banks offering High Yield Savings Accounts. If you are wondering what it means, as the name specifies, it is a savings account with a higher annual percentage yield. There are usually a few perks associated with these accounts.
Typically, banks only let valued customers use these accounts and this may include customers who can make a large initial deposit, customers capable of keeping a huge balance in the account over a period of time, or who limit the inflow and outflow to and from the account with less transactions.
Following the latest trend, banks are steering away from the traditional mode of investment and towards this end, high yield savings account can be operated online too. With online high yield savings accounts, anyone can open an account online even with a few dollars and these accounts are ideal for youngsters who are just beginning to save.
Until recently, banks were offering as less as 1% on a savings account. High yield savings account yields interest rate of as much as 5% and this is extremely good and can be comparable to money market accounts or CDs, but with a difference, and that is the added benefit of withdrawing the money as and when they need it without having to wait for years for it to mature. Watching their liquid money grow in a savings account is a new concept and attracts many customers.
Banks are able to offer such high rates by limiting the ease at which funds can be withdrawn. There is no check writing facility or ATM access and to be able to access the cash, one needs to transfer it online or by a phone call, which can take a few days. But this can prove exceptionally beneficial to those that are in no hurry to take out their money and wish to save.
These accounts are FDIC insured and offer very similar transaction facilities like other savings accounts. There are no fees for their services or minimum balance requirements. Customers are allowed to keep their existing checking accounts and link it to the high yield savings account.
High yield savings accounts offer a lot of flexibility and money can be simply passed through the account and many banks allow networking different accounts too. These accounts can also be opened over the phone, and although internet is required to access this account, it is easy for people in initiating the setup process over the phone.
If you are looking to save money in a most secure manner and enjoy earning a bonus interest rate, these high yield savings accounts are certainly for you.