Savings vehicles are becoming increasingly popular, especially among consumers who want to boost their savings. In fact, a recent survey found that 43% of Americans want to save more money in 2022, and 51% are focused on long-term savings goals.
Yet with all the savings vehicles available, knowing which option to choose can be challenging. High-yield savings accounts are one popular option, and they generally offer more flexibility and higher interest rates than traditional savings accounts.
Below, we share some of the main benefits of high-yield savings accounts—and how to decide if a high-yield account is right for you.
Higher Rates of Return
Like traditional savings accounts, high-yield savings accounts offer a simple way to grow your savings. They also allow you to automate monthly contributions, and provide an easy way to track your savings over time.
Unlike traditional savings accounts, the annual percentage yield (APY) of high-yield savings accounts is considerably higher than that of traditional savings accounts—generally 20 to 25 times higher. What’s more, many high-yield savings accounts are offered by online banks and don’t require minimum deposits.
The Ability to Save for Specific Goals
Another important benefit of high-yield savings accounts is that they can be used to save for specific goals. While traditional checking and savings accounts are useful for short-term savings, high-yield savings accounts are a great option for longer-term savings goals such as building an emergency fund or saving for a down payment on a home.
Depending on your financial situation, you may also find it helpful to have multiple high-yield savings accounts for different goals or to choose an account that can let you create goals and allocate funds accordingly.
A Low-Risk Way to Grow Your Savings
One of the other key benefits of high-yield savings accounts is the fact that they don’t carry the same level of risk as brokerage accounts. Since high-yield savings accounts don’t depend on market performance, they are far less risky than investing in stocks or bonds. Because of this, they can offer a level of protection and predictability that is hard to achieve with many investments.
If you’re thinking of opening a high-yield savings account, it’s important to consider several factors when choosing one. These include the annual percentage yield of the account and how easily you’ll be able to access the funds. With Bask Bank, the Bask Interest Savings Account earns a 2.20% annual percentage yield and provides the ability to open an account in minutes. What’s more, it also has zero monthly account fees and no minimum balance requirement. And since there’s no cap on the amount of interest you can earn, the more you save, the more you earn.
Bask Bank also offers another way to maximize your savings. The Bask Mileage Savings Account earns one American Airlines AAdvantage® mile for every $1 saved annually so you can save on travel while setting money aside to meet your goals. With seamless transfers between accounts, Bask Bank also makes it easy to make your money go further by keeping it in the account that’s right for you.
With a combination of flexibility and liquidity, high-yield saving accounts can be a great way to increase your savings over time. They can also provide a simple way to automate savings so that you can prioritize setting money aside and achieve your financial goals.
Bask Bank and BankDirect are divisions of Texas Capital Bank. Member FDIC. The sum of your total deposits with (i) Bask Bank; (ii) BankDirect; and (iii) Texas Capital Bank are insured up to $250,000. Additional coverage may be available depending on how your assets are held.