As more people are looking for ways to invest and grow their savings, high-yield savings accounts (HYSAs) are increasing in popularity. HYSAs are widely considered as a safe place to stash money and grow it faster than a regular savings account. If you’re interested in opening one, there are several benefits to consider and a few drawbacks you should monitor. 

Here is a quick guide on what you need to know about high-yield savings accounts. 

What is a High-Yield Savings Account?

A high-yield savings account is a savings account that has a higher interest rate than a traditional savings account. The qualifications for an HYSA vary based on the financial institution. Some require a minimum or maximum balance while others may limit how often you can access your money. 

At Achieva, you can open a HSYA with an opening balance as low as $1, or with no minimum or maximum balances. To open a Premium Savings Account call 727.431.7680 or visit a branch.

What to Consider When Looking to Open a High-Yield Savings Account?

Before opening an HYSA, there are a few things you should research. First, check the annual percentage yield (APY) offer for the account. Many of the benefits of an HYSA are attached to how attractive that APY is, so you’ll want to ensure it’s at a good rate that will allow you to receive the best possible return on your money. Shop around and compare rates between banks, credit unions, and other financial institutions. 

Next, be sure to research and look for any account fees, withdrawal/transfer limits, and if the HYSA at the bank or credit union is FDIC-insured.

What Are the Benefits of a High-Yield Savings Account?

High-yield savings accounts can be an important and lucrative part of your savings strategy. Consider these positive opportunities of opening an HYSA:

• Higher interest rates that compound daily or weekly.
• Better and more immediate access to your money. 
• Fewer fees if you need your money in a pinch.
• A lower financial risk and less exposure to market forces.

And keep in mind, the option to open a HYSA isn’t solely for adults. It’s also an excellent option for parents looking to open a savings account for their children. 

What are the Drawbacks?

While there are several great reasons for having a high-yield savings account, there are also a few issues to keep in mind: 

• Advertised interest rates may not exceed inflation rates, which means your money could have less spending power. 
• You can lose out on longer-term returns if you keep too much money in a high-yield savings account. 
• If you don’t need immediate monetary access, buying a certificate of deposit can get you a higher rate with a more predictable return. 

A high-yield savings account is a great way to build wealth without putting your money into riskier endeavors. 

Talk to an Achieva professional about whether it’s the right choice for you. 

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