A number of banks offer a High Yield Savings Account. What exactly does that mean, and how is it different from any other account? Let’s look at what these banks mean when they refer to a high yield savings account, and where you can find them.
You Gotta Name it Something
The term “high yield savings account” is just a way of saying it’s a savings account (ideally a very competitive one). There are usually some perks to these accounts. Typically, you’ll enjoy a higher
APY (Annual Percentage Yield). However, you may not agree with the bank on what constitutes a “high” APY.
Requirements for a High Yield Savings Account
Typically, banks only offer high yield savings accounts to certain customers. To qualify, you probably need to meet at least one of these criteria:
- Make a sufficiently large initial deposit
- Keep a high balance over time
- Limit transactions in and out of the account
- Maintain other banking relationships
Banks only want to offer high yield savings accounts to valued customers.
Internet Bank Accounts
Internet bank accounts might be an
exception to the rules above. These accounts offer higher rates with account sizes as small as one dollar! The tradeoff is that you have to do more of the work yourself: using the internet, linking accounts, and managing transfers.
How to Find High Yield Savings Accounts
I recommend using an internet bank account if you’re comfortable banking on the web because you’ll generally have
less restrictions. You can find reviews of some of the popular accounts
here. You can also search through the
banking blogs and communities for recent additions to the marketplace.
If you’re a bricks and mortar person, you should just check with your existing bank. Ask what you need to do to get a higher rate than you’re currently getting. If they can’t offer you anything, search for “High Yield Savings Accounts” online. You should be able to find an established bank in your area with something to offer.
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