High yield savings account 101: How can it help me?
Remember the good old days when people used to keep their savings in mattresses and coffee cans?
Neither do we. No matter how much money you have socked away, it isn’t doing you any good if it’s sitting stashed away somewhere instead of working to earn you interest.
The same is true if you’ve stashed your funds in a typical savings account. Although it’s a step up from a coffee can — at least your money is earning some interest — you still aren’t maximizing your money’s full interest-earning potential.
Fortunately, it’s an easy fix. All you need to do is give your money a raise by putting it in a high-yield savings account. Yes, it’s that simple. By incorporating a high-yield savings account into your money plan, you can help ensure your money is operating at max efficiency.
How high-yield savings accounts work
A high-yield savings account works just like a regular savings account. You deposit your money, the bank pays you interest, and you make withdrawals as needed. The main difference is that a high-yield account pays higher-than average interest (typically 20 to 25 times the national average).
So, what’s the catch, you ask? There actually isn’t one — especially if you choose an account like OCCU’s Ignite Savings. When you deposit your money in an Ignite Savings account, you’ll earn 5.25% APY* on the first $500 you deposit. That’s almost 33 times higher than the national average savings account interest rate of 0.16%.
With no minimum deposit or balance and no limit on withdrawals, there’s absolutely no downside.
Investing your money in a high-yield savings account like Ignite Savings is a smart money move, especially in today’s economy. For example, it can:
- Help offset the impact of inflation on your budget.
- Allow you to make interest rate increases work in your favor.
- Work in tandem with our Remarkable Checking account to power up your finances.
- Help you build up an emergency fund, save for a down payment or work toward any short-term savings goal.
- Support your long-term financial goals by helping you grow your money faster.
Financial wellness tip: Discover how big an impact a high-yield savings account could make on your finances by trying out our Ignite Savings interest calculator.
How to get the most from your high-yield savings account
A high-yield savings account is an excellent place to start building up your savings. But it’s not the only deposit account you should consider. It works best when it’s integrated into a larger financial strategy.
For example, we recommend taking advantage of our Dynamic Duo by pairing your Ignite Savings account with Remarkable Checking, our interest-earning checking account. This account combination ensures every penny you deposit with us is working to earn you interest. These two powerful accounts can help maximize your financial wellness.
Once you’ve built up some initial savings, you might also want to consider taking a portion of your funds and deposit into a Certificate of Deposit (CD) or money market account to take your savings to the next level.
How to open a high-yield savings account
At OCCU, we always keep your future in mind when designing our deposit accounts. That’s why all our high-yield savings accounts offer competitive interest rates, minimal to no fees and low barriers to entry.
Ready to start earning more interest? You can open an Ignite Savings account online today using your OCCU member account. You — and your money — will be glad you did.
Insured by NCUA.
*Ignite Savings account annual percentage yield (APY) and rate may change. Fees could reduce earnings. 5.25% APY on balances up to $500, 5.25%-3.45% APY on balances $500.01-$2,500, 3.45%-2.23% APY on balances $2,500.01-$5,000, 2.23%-0.85% APY on balances $5,000.01-$25,000, and 0.85%-0.15% APY on balances of more than $25,000.01. First-year earnings are based on a 12-month average. APY effective 6/01/2022 and subject to change.
