Upgrade Your Savings Accounts

April 26, 2023

Upgrading Your Savings Accounts

For many, savings accounts are used for the purpose of keeping assets liquid. Over the past decade, those savings accounts have had little to no return, making that not much different than hiding your money under a mattress.

The reason for this lull in savings growth is that many big banks and credit unions only pay very little interest on savings account balances. In a low interest rate environment, not much can be done about this. However, over the past two years we have seen interest rates increase, which provides an opportunity to reap more benefits from a savings account.

In this higher interest rate time high-yield savings accounts (HYSA) pay significantly more interest – ranging anywhere from 3-4% APY (Annual Percentage Yield).  or higher. These rates tend to be more common at “neo-banks” or “non-traditional banks” because of their limited brick and mortar locations.

If you are comfortable banking online, a HYSA can provide a great opportunity to get your dollars working for you in a relatively safe manner. Some options for HYSA accounts include those at CapitalOne, SoFi, Ally Bank, and Citi bank. HYSA accounts at banks and credit unions are federally insured up to $250,000 per depositor and many nonbank providers partner with banks for insurance.

If you have any questions regarding these HYSAs and if they could be beneficial to you, please do not hesitate to give our office a call.