What is a High-Yield Savings account?
A high-yield savings account does just that – it pays you a higher Annual Percentage Yield (APY) than a traditional savings account. With traditional savings account interest rates hovering around 0.5%, and high-yield savings accounts between 4%-5%, a savings account with a higher interest rate can be a great way to make your dollars work for you. For instance, $5,000 in a traditional savings account at 0.5% APY will earn you only $2 per month, while a high-yield savings account at 5% will earn you approximately $20 per month, with interest payments going up every month as interest compounds daily. What is daily compounded interest? Compound interest means that at the end of each day, 1/365th of the interest rate on your balance is calculated. So, on your $5000 deposit into a high-yield savings account at 5% APY, the bank calculates 1/365th of that 5% interest at $0.68 boosting your balance to $5000.68.
High-Yield Savings account is just a fancy way of saying “Savings Account with a high interest rate and APY” – in this day, with so many choices available and easily located online, consumers can compare High-Yield Savings account rates with the rates they were used to getting, usually with highly favorable results. MoneyAisle is a quick and easy way to find a great rate on a High-Yield Savings account. In just a couple of minutes you can watch the banks in the MoneyAisle network iteratively bid in a live auction to get you the best rate High-Yield Savings account within our system, on demand, 24/7, and absolutely free. All you need to do to get started is register for an account, and then run an auction for a High-Yield Savings account. You’ll find that when you compare High-Yield Savings accounts found through MoneyAisle’s auction process, where banks bid live for your business, that you’ll get an amazing rate for your deposit.
High yield saving account is relative to the existing rates for any given quarter. When Jimmy Carter was president, and inflation was 22% and the average interest rate was 12% 18% was a high yield savings account. Now that Interest rates are closer to 3% and inflation is about 5% you would consider 5% a high yield savings account.
