With the advent of purely online banks as well as traditional banks that have opened doors for customers nationwide by opening online accounts, competition in savings rates has increased rapidly, creating a new category of ‘high-efficiency savings accounts. Are high yield savings accounts safe?
A high-efficiency savings account is a type of savings account that usually pays 20-25 times the national average of a standard savings account. Traditionally, people have a savings account in the same bank where they run a checking account, making transfers between them easy and quick.
High performance savings accounts are secure
Many people feel safer when they see where their money is going. When you get to your local bank and make a deposit, you’ll see that the cashier is taking the money. But you can’t see what will happen when you leave. The process is the same whether you use a local or online bank. The only difference is the lack of an ATM in an online bank. Instead, you make deposits electronically.
How to choose the best interest-bearing savings account
Look for accounts that have both high APRC and low service fees. You want to be sure that you don’t have to pay to the bank every month. Some institutions do not charge monthly fees, while others charge, but they will renounce them if you reach the minimum balance.
Be ready to look beyond the larger, well-known banks. Many smaller institutions – including internet banks – have savings accounts with the highest APRC and low deposit requirements.
How to open an account with the best APRC
Depending on the type of bank, you can open a high-interest account online or in person. You must provide your social security number and contact details, as well as at least one form of identification, such as a driving license or passport. (In the case of a joint account, anyone who wants to access the account must provide this information and ID.) The bank often requires immediate payment to a new account. You can do this by depositing cash or checks, or by bank transfer.
If you manage to overcome the fact that you can’t go to the bank and see the face of a friendly cashier, online savings accounts can earn more money. You can even say that you save more because you can’t drive down the street and withdraw money. Find a trusted bank online and start earning today.