If you are tired of earning pennies on your savings, or nothing at all, it may be time to open a high yield checking or savings account. Compared to the averages, these high yielding accounts offer truly astounding rates of interest, as much as 25 times the going rate. These accounts can be very attractive vehicles for savers and consumers, but they do come with some strings attached. Here are some factors to consider before opening a high yield checking or savings account.
Your Bank My Not Offer One
High yield checking and savings accounts are specialty vehicles, and not every bank will offer one. If you want to take advantage of the higher rates, you may need to move your money to an institution that offers a high yield account. High yield checking and savings accounts are offered by both banks and credit unions. It still may take some work to track one down. If you do move your money to a new institution, you will need to research things like ATM fees, maintenance costs and other factors. Each of which could reduce the attractiveness of your new high yield account.
You May Need to Establish a Direct Deposit
The financial institutions that offer high yield checking and savings accounts are free to set their own requirements. That could include establishing a direct deposit. Having your paycheck deposited into your new account is one way to tie you to the financial institution in question, so it is to their advantage to set this requirement.
Establishing a direct deposit may be no big deal for the traditionally employed. It can be an issue for gig workers and the self employed. If a direct deposit is required to qualify for the high interest rate, make sure you understand exactly what is required and whether or not your own form of payment qualifies.
On the next page you will find more key factors to consider before opening a high-yield savings account.