Daniel Stewart

Four Benefits of Opening a High Yield Savings Account

There are many ways to save money and stash your cash for a rainy day. A high-yield savings account is a great choice, whether you're saving for a big purchase or want that peace of mind from a sizeable nest egg.

But what is a high yield savings account, and why would you want to open one? Here's a quick breakdown of this money-saving technique and some of its many benefits.

What is a High Yield Savings Account?

This savings account operates similarly to any other savings account. You deposit money, sit on it, and generate interest. But as the name implies, these accounts have a much higher yield than traditional alternatives.

The exact rate can vary from one provider to the next. But on average, you can earn about ten times more interest than standard savings accounts. That's a good chunk of change that will help your money grow as it sits in savings.

The Perks of a High Yield Savings Account

Beyond the great interest rate, there are many benefits to high-yield savings accounts. Here are just a few.

Daily Compounding Interest

These accounts compound interest daily. Other savings accounts can do the same, but most will do so annually, quarterly, or monthly.

You can start seeing growth pretty quickly with daily compounding, even if you don't have a ton in your account.

FDIC Insurance

Of course, these accounts come with the safety net of FDIC insurance up to $250,000. It's a risk-free savings account that keeps your money safe.

Accessible When You Need It

A high-yield savings account lets you compile interest and stash your money away. But it's still there when you need it. There's no penalty for making withdrawals. Remember: Interest compounds daily.

You can pull money when needed and keep the rest behind for continued growth.

Choosing a High-Yield Savings Account

There's no shortage of suitable savings account providers out there. Like any other money product, you have several options to sift through. The best accounts offer low maintenance fees, easy bank transfers, and other perks that make money management a breeze.

Author Resource:-

Daniel Stewart has been helping people with their money management and personal finance with over 15 years' experience in business finance. You can find his thoughts at health investment blog.