Does Bangor Savings Bank Charge To Transfer Money?
When it comes to personal finances, it's no secret that stashing abroad greenbacks for an emergency is always a good idea. An erstwhile rule of pollex says that yous should relieve up at least three months' worth of living expenses just in case the unexpected should strike. And, experts at present say it's better to keep enough to cover six months' worth of living expenses on hand then yous're even more than thoroughly prepared for a potential financial downturn.
But where should you put that extra coin you're saving for emergencies — or the coin you lot're setting bated for other financial goals? A high-yield savings account can be a solid choice that helps you earn while you salve. To make up one's mind if this option is right for your needs, take a wait at this overview of what a loftier-yield savings business relationship is and how it differs from traditional savings accounts.
What's a High-Yield Savings Account?
In many means, high-yield savings accounts are similar to traditional savings accounts. They're bank accounts where you lot tin can safely store money you don't need to spend right abroad and let those funds to earn interest. What sets high-yield accounts apart, however, is that you lot'll earn more money faster when it comes to interest. "Loftier yield" means there'south larger income returned on your investment — which, in this instance, is just the money you've deposited into the account.
Co-ordinate to the FDIC, the average annual render for a traditional savings account is around 0.06%. With a loftier-yield savings account, however, yous can expect to earn an interest rate that'south anywhere from 10 to 25 times college. While the return on even the highest-yield savings account is still unlikely to make yous a millionaire, it'southward better to accept advantage of as high an interest rate as y'all perhaps tin and earn more over time than you lot would with a traditional savings business relationship.
How Do High-Yield Savings Accounts Work?
One helpful matter most high-yield savings accounts is that these types of accounts work just similar their traditional counterparts. While some require minimum deposits, there are at present plenty that don't. Y'all'll simply open the account only similar you would a regular savings business relationship and and so begin making deposits.
Up until a few decades agone, well-nigh people opened savings accounts at the same banks where they had checking accounts. Due to the rising of online banking, however, information technology's now much easier to be pickier nearly savings business relationship interest rates. While it used to exist a chip of a hassle to have accounts open at dissimilar financial institutions, it's at present far easier to link and transfer money effortlessly between accounts online. Keep this in mind when you start researching banks where yous might open your high-yield account.
What Are the Pros and Cons of Loftier-Yield Savings Accounts?
If you're looking for a stress-gratis place to stash your money, a high-yield savings account may be for you. They're a neat identify to build a nest egg or even save upwards coin yous'll put towards the down payment on a item purchase, such as a house or car. Ultimately, whether or not it'due south worth opening one volition depend on your fiscal goals. Here are some pros and cons to help put things in perspective.
Pros
- While "high yield" may hateful you could enjoy an interest charge per unit of one% — non a huge amount when you consider the interest rates you might pay on loans or credit cards _ the interest you'll earn on a high-yield savings account is nonetheless a lot better than the low returns traditional savings accounts offer.
- As long every bit you open your business relationship through an FDIC-insured institution, it'll exist automatically insured up to $250,000. Even if the depository financial institution were to go under, your money up to that corporeality would still be safe.
- Many high-yield savings accounts offer compounding interest, which means that you earn interest on earlier interest the bank paid y'all.
- You tin withdraw your money at any time. Dissimilar many government bonds or certificates of deposit (CDs), high-yield savings accounts don't require your to commit to leaving your coin untouched for a sure amount of fourth dimension.
Cons
- Even though a high-yield savings account is one of the safest investments yous can make, it'south non among those that offering substantial gains. While a i% interest charge per unit may be impressive when it comes to savings accounts, you'll earn more than money over fourth dimension by investing in bonds, CDs or even your retirement business relationship.
- Involvement rates can fluctuate over time, then your rate of return can decline over time — but it tin can also increase.
- Many loftier-yield savings accounts are available through online banks that may not actually have physical locations. Make sure y'all look into ATMs y'all can withdraw cash from without paying fees earlier signing up.
- Like all savings accounts, there are limits to the number of withdrawals you lot can make per month without incurring fees.
How to Open a High-Yield Savings Business relationship
One of the virtually important elements of opening a new savings account is figuring out which one is right for y'all. As mentioned, many of the financial institutions that offer the highest yields exist completely online.
The adept news is that this makes information technology easy to compare rates and even open your account right from your computer. Alternatively, yous may be able to observe a brick-and-mortar bank or credit union that offers high-yield savings accounts. In that case, y'all tin by and large either open up 1 in person or online if you prefer.
While you lot'll want to look for a bang-up involvement rate, at that place are a few other things to check on before opting for what looks like a peachy offer. When making your comparisons, look into things like:
- Whether the involvement rate is compounded and if so, how often it compounds
- Where the nearest gratis ATMs are that you'll exist able to access without paying fees
- If the business relationship requires a minimum residual
- If in that location are any maintenance fees associated with the account — these are relatively uncommon, especially when it comes to online savings accounts, only it's amend to practice your inquiry than to find out after y'all end up owing them
The Lesser Line on Loftier-Yield Savings
In general, a high-yield savings account is a great way to maximize your return when it comes to saving upward personal emergency funds or saving for a vacation or other large purchase. As long as you choose an FDIC-insured account, it should be a condom and liquid way to store your money until you need it.
Proceed in mind that even a high-yield savings account shouldn't be the end-all of your financial strategy. Most customers utilise them equally a risk-free part of an overall portfolio that besides includes things similar stocks, bonds and other investments. Although they may non accept an impressively loftier return, loftier-yield savings accounts can give you a substantially college render over fourth dimension than a traditional savings account. And, their adventure-complimentary nature means you don't have to worry about disasters such as a stock marketplace crash that could otherwise drastically alter your funds overnight.
Source: https://www.askmoney.com/investing/high-yield-savings-account?utm_content=params%3Ao%3D1465803%26ad%3DdirN%26qo%3DserpIndex
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