Opening up a high-yield savings account is one of the best ways to grow your money in 2024. With interest rates on the rise, many banks and credit unions are now offering yields of 4-6% APY or more on savings accounts.
This creates an excellent opportunity to earn significantly higher returns compared to the national average savings account rate of just 0.46% APY.
Let's explore the benefits of high-yield savings and provide tips on how to maximize your returns.
Why High-Yield Savings Accounts Are Attractive Now
High-yield savings accounts pay an above-average interest rate that is compounded daily and credited to your account monthly. This allows your money to grow faster over time through the power of compound interest.
Whereas most traditional savings accounts pay less than 0.50% APY, the best high-yield accounts today offer between 4-6% APY. Some credit unions even offer rates up to 7%. This means you could earn up to 12 times more interest in a high-yield account versus a standard savings option.
With the Federal Reserve repeatedly raising interest rates to combat inflation, banks have followed suit by boosting the yields on their deposit accounts. Savers willing to shop around can capitalize on this trend by scoring a high APY.
Tips for Maximizing Your Savings Return
Follow these tips to optimize your savings strategy:
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Compare rates frequently.
Interest rates fluctuate often, so check bank websites regularly to find the highest yields. Move your money as better offers emerge. -
Watch out for fees.
Some accounts charge monthly maintenance fees unless you meet balance minimums. Opt for no-fee accounts. -
Automate transfers.
Set up recurring transfers from your checking to savings to steadily build your balance. Consistent saving is key. -
Take advantage of promotional rates.
Some banks offer special promotional APYs for a limited time to win new customers. Capitalize on these deals when available. -
Earn interest on large deposits.
To maximize your return, some credit unions offer their highest rates only on large deposits (e.g. over $100k).
Conclusion
With interest rates rising, keeping your savings in a high-yield account is one of the best moves you can make. Compare options frequently and automate transfers to optimize your savings strategy. With yields over 6% APY now available, you'll earn significantly higher returns that allow your money to grow faster.
