The high yield savings accounts offered by online financial institutions carry higher interest rates than their traditional savings accounts or checking account counterparts. These are FDIC insured accounts that will not impact your credit score and generally have a minimum balance requirement and minimum opening deposit determined by each bank.
Although the current financial climate has resulted in lower interest rates on savings, the annual percentage return (APY) on high yield savings accounts is still significantly higher than savings offered by traditional banks. .
In addition to earning interest, these accounts are easy to open and require a minimum of requirements, especially if you are banking online. Axos Bank, Vio Bank, Varo, and Ally are examples of online-only institutions that offer high yield accounts, and places like Citi Bank, American Express, Capital One, and Goldman Sachs do the same.
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Credible can help you find a savings account provider with high yield and interest rates that will increase your savings. Find out what options – from each bank’s minimum balance requirement to its APY – are currently available.
Here’s a step-by-step guide to help you open a high yield online savings account.
1. Compare prices, institutions and requirements
The first step to earning interest on your savings is to compare banks, credit unions, and online institutions.
The national average savings account only earns 0.04% APY, according to the FDIC. You can check out the high yield savings options through the Credible Marketplace to save extra money.
In addition to comparing the rates of different institutions, you should also compare the conditions for opening an account. These could include:
- Monthly withdrawal limits
- Minimum deposit requirements
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Not all accounts have the same transaction fees, annual fees, and minimum deposits. To see how high yield savings accounts can save you money, check out these high yield savings options through the Credible Market.
2. Choose where to open your account
Once you’ve done your research, it’s time to choose a home for your savings account. Your local bank is not likely to offer rates as competitive as online-only banks, as online banks don’t have to worry about the expense of running a physical business, which means they can offer more attractive rates. to their account holders.
If a credit union offers the best rates, be aware that you may need to become a member, which can have even more rules.
Finally, consider the requirements of each account on your list of options, which can help you select the best candidates. It might be helpful to speak with a financial advisor to finally make up your mind about where to open an account.
3. Submit the request
Once you’ve chosen an institution for your High Yield Savings Account, it’s time to apply.
Applying for a high yield savings account is quick and easy. If you open an account with your local bank, you may need to apply in person. If not, you should be able to complete an application and open an account online in about 10 minutes.
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The app may require you to provide the following personal information:
- Last name
- Date of Birth
- Contact information
- Social Security number
- Driving license
If you open a joint savings account, the app will ask for the above details for both applicants.
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Your request may also include questions to help confirm your identity. Once your information has been submitted, you should be approved for an account.
4. Start funding your account
Depending on the institution you choose, you may need to fund your account during the application process. While some banks have an initial deposit requirement, others may not require you to put funds into your account to begin with.
The most common way to fund your savings account is to connect an existing bank account. This step will ask you to enter your routing and account numbers. You may be able to directly log into your bank account to verify the account. Alternatively, test transfers can be sent to your bank account to verify this.
If you can’t link to your bank account, some institutions allow you to submit a mobile deposit, mail a check, or use a credit card.
5. Configure account details and preferences
Once your account is open and funded, consider following these steps:
Configure online banking: If you are signing up for a high yield savings account online, you will likely be prompted to create a login and start online banking upon request.
Download the app: If your establishment has a mobile app, download it for easy access to accounts and management features.
Manage alerts: Set your preferences for account alerts regarding deposits, transfers, and your account balance. You can choose to receive email, text, or mobile notifications.
Go paperless: Many institutions charge additional fees for paper statements. Choosing to receive electronic statements can make things easier and save you money.
Name of beneficiaries: It is a good idea to designate a beneficiary to inherit your account if you die. Many online accounts allow you to designate a primary and secondary beneficiary, such as your spouse and child.
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Start saving and earning today
A high yield savings account is a great vehicle for short term savings goals and emergency funds. With little to no associated costs, easy access to funds, and competitive interest rates, a high yield savings account can be a great personal finance addition to your long term plan.
Luckily, opening an account, funding it, and being able to access your money couldn’t be easier. If you don’t want to leave any money on the table, you can maximize your income with these high yield savings options on the Credible Market.
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