How to Open a High-Yield Online Savings Account
Is a High-yield Online Savings Account the Right Option?
When you are looking to really take control of your finances, your average savings account just doesn't make the cut. Though a savings account does offer a secure way of keeping your money within easy reach, the interest you earn over time is going to be minimal, and you may even encounter some losses when taking interest into consideration. High-yield savings accounts are a safer alternative to stock market investments and are a wise option for savers. Here is everything you need to know before choosing the right online savings account for you.
It's Not All About Yield
It's tempting to just look for the account with the highest yield and be done with it, but don't be fooled -- there are a number of factors you should take into consideration before investing your hard-earned cash:
- Initial Deposit - All accounts will require a minimum deposit, and this is often a very large sum for the accounts with the highest yields. Be realistic about how much money you can afford to invest, and don't be sold on anything above the amount you are willing to pay in.
- Rate of Interest Paid - Some banks offer special introductory interest rates, which quickly diminish once you are tied into the contract. Read the small print closely before making any commitments.
- Additional Fees - Hidden charges surprise lots of customers. In order to avoid any unexpected numbers on your bank balance, don't be afraid to ask your advisor directly if the account incurs any additional fees.
- Maximum Number of Transactions - Some customers require more flexibility than others. If you think you may need to access your money within the investment period, then look for an account that allows you to make numerous transactions. Otherwise, you may not achieve the original stated return on your investment.
- Cash Withdrawal - Most online savings accounts will allow you to make withdrawals over the Internet, but it is a good idea to check with your advisor before choosing one. It's often much easier to deposit money than it is to take it out again.
How Do I Open an Online Savings Account?
There are lots of websites available online for you to compare the different high-yield accounts available. It's worth checking these regularly since investment opportunities are constantly changing. Once you have made your decision, it's advisable to talk to a representative of the bank or investment company either by phone or in person. If you are already registered with the establishment, you may be able to complete the investment online with the help of your advisor. However, in most cases, you will need to make an appointment to speak with an advisor in person in order to provide identification and go over the finer points of the account. During these meetings, be very aware that high-yield savings account providers may attempt to sell you a product that won't give you the best yield for your investment. To avoid this, make sure you take along all your research, and ask as many questions as possible to make sure that you are making the right decision. Never feel rushed, and if something doesn't feel right, then don't be afraid to walk away and look for other options.
High-yield savings accounts offer a safe, insured solution for anyone looking to invest their savings and earn a higher rate of interest than a normal savings account would yield. Always make sure to shop around to find the best account for your personal circumstances, bearing in mind that you may not want to invest all your money in one place or limit your access to a large proportion of your cash.