4 factors to consider when choosing a high-yield savings account

High-yield savings accounts are found at both online and brick-and-mortar banks and credit unions. High-yield accounts offer better APYs than standard savings accounts, but rates are variable, and you can only six make withdrawals in one month. (iSto

High-yield savings accounts offer a higher interest rate than standard savings accounts — nearly 1% (or almost 10% higher). A high-yield account can help you build an emergency fund, afford a long-awaited vacation, fund home improvements, pay off a large purchase, and more.

Rates on high-yield savings accounts vary but currently teeter between 0.45% and 1%. So if you’re considering socking away a portion of your money, you’ll want to explore ​how you can earn more cash with high-yield savings options via Credible​.

4 factors to consider when choosing a savings account

Check out these 4 factors before making a final decision.

  1. Opening an account with an online or traditional bank
  2. High-yield savings account interest rates
  3. Flexible access to money
  4. Added bank fees

1. Opening an account with an online or traditional bank

In 2019, the number of online digital banking users surpassed 161 million in the U.S., according to Statista. That’s a 20% increase from 2014. That doesn’t mean people have turned their backs on traditional banks and credit unions, as most still prefer building a banking relationship and face-to-face interaction with a banking representative.  But more and more consumers are turning to online banks. They may lack the personal connection, but they generally offer better rates and terms because they have fewer overhead costs than on-site banks. Most online and traditional banks and credit unions are full-service and offer checking and savings accounts. Some online banks also offer CDs, money market accounts, loans, and more.

Most online banks offer account access via an app. You may also be able to schedule recurring deposits into your account.

To see how high-yield savings accounts can save you money, check out these high-yield savings options via the Credible marketplace to save extra cash.


2. High-yield savings account interest rates

The majority of high-yield savings accounts are available online or at a physical location near you. All come with FDIC insurance, so your money is protected (up to $250,000 per account). When choosing a high-yield savings account, look for one that offers an annual percentage yield (APY) greater than on a standard savings account.

The APY controls how much interest you’ll earn in a year, so the higher the APY, the faster your savings will grow. As APY’s are variable (not fixed), they fluctuate with the federal rate and depend a great deal on the economy’s strength. So the more robust the economy, the better the average APY.3 REASONS TO OPEN A HIGH-YIELD SAVINGS ACCOUNT WHEN RATES ARE LOW

3. Flexible access to money

Although APYs are low, high-yield savings accounts are still a good (and safe) way to build an emergency fund. But there’s a catch. Withdrawals from your account are limited to six per month by law. Go over the monthly limit, and you’ll face hefty fees.

If you want the flexibility to access your money more often, you may consider an interest-bearing checking account instead. Even so, no matter how much money you have to deposit, there’s little doubt you can save extra cash with high-yield savings options​ from Credible.


4. Added bank fees

Many online, traditional banks and credit unions charge fees, but certainly not all. Costs can really add up, especially when the average customer can pay more than $300 a year in bank fees. So to grow your money as fast as possible, it’s important to shop for a bank that charges few fees or no fees at all.

The many reasons you might be charged fees and penalties on high-yield savings accounts include:

  • For opting to receive paper statements.
  • For making more than six withdrawals from your account in one month.
  • To close your account before a specific time period.
  • If your balance falls below a specified amount during a statement cycle.
  • Monthly service charges or maintenance fees.
  • If you don’t maintain an average daily balance. 

Due to the impact on personal finances by the coronavirus pandemic, many banks—online and traditional—are stepping up to help out their customers by waiving many standard fees and penalties. That makes it an excellent time to stash away some extra cash. So, if you’re interested in quick and easy ways to save money, visit Credible to ​find a high-yield savings option that best fits your savings goals​.