What is a high yield savings account?

Main points: High- yield savings accounts are just one available type of deposit account. High-yield savings accounts often have a high Annual Percentage Yield, (APY) and offer flexible access to funds. Fees may be charged for frequent withdrawals from high-yield savings accounts, and tools may be limited.

Why should you invest in a high-yield savings account?

So, new interest is earned and then goes on to earn its own interest (and so on and so on). Compound interest at this higher percentage rate makes the high-yield account attractive to savers who want to put their money to work with no additional effort. Many high -yield savings accounts don’t require a minimum amount to be kept in the account.

Are high-yield savings accounts worth it?

Having at least one high-yield savings account is worth it for most people. The best high-yield savings accounts offer several advantages, including competitive interest rates and safety. Here are two reasons why you might consider one: Emergency savings. High-yield savings accounts are an excellent choice for building an emergency fund.