With interest rates on the decline, it may be time to look into a bank account that makes you money. But you may want to keep your assets liquid. Here are 5 steps to choosing a High Yield Savings Account (HYSA) that can help you make a little extra cash every year.

1. Understanding Your HYSA

Your high yield savings account is a safe place for your money to earn interest. It will also be easily accessible as an emergency fund, as well as for any downtime for your family or business. The annual percentage yield (APY) can be as high as 4% or more meaning that you can get $200 for every $5,000 you keep in the bank, rather than having it just sit there. Additionally, these accounts are also almost always FDIC insured – just as a traditional savings account.

2. Top Considerations for a HYSA

Each high yield savings account is different, but here are the main factors to consider when selecting yours:

  1. The APY, as it is the best benefit.
  2. Minimum deposits to open, if any, in order to receive the best APY.
  3. Minimum monthly balance to maintain, if any, in order to avoid fees.
  4. Any annual or monthly management fees.
  5. The ability to write checks, whether physical or online, if needed.

3. Bonus for Signing Up

Did you know some HYSA’s offer a bonus for signing up? This can be anywhere from hundreds to thousands of dollars depending on the amount of the deposit. Many of these banks also offer affiliate programs, so you can earn even more by sharing a link with family, friends, colleagues, etc.

Did you know? The average American family has a savings account of approximately $8,000, which could earn $320 per year at 4%? Source: Chase Bank

4. Check With Your Bank First

Your current bank may be willing to meet an HYSA rate under the right circumstances. For example, say you have a $10,000 savings account and they offer a 3% APY. Another bank offers 4% APY. Contact your bank and see if they will give you the same rate. We guess some banks may choose to offer a better APY rather than lose the account.

5. Check Again Next Year

With interest rates always in flux, you may find better rates in the future. After your APY comes in, it is the perfect time to shop around again. Be sure to check the bank with your current HYSA first to see if they can improve on their current rate.

More on 5 Steps to Choosing a High Yield Savings Account in Houston

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