High Yield Savings Accounts

Saving money is one of the most important skills you can learn and develop while in college. Part of the process of getting into the habit of saving is finding the best place to save your money. To make the most of all the hard earned money you are saving, a great option is to open up a high yield savings account (HYSA). One major benefit of a high yield savings account is that you have access to much larger interest rates than traditional savings accounts, so your money will grow and compound even faster! 

 

When determining the best HYSA, one of the main factors you will want to take into consideration is the interest rate. Since the federal reserve has been raising interest rates consistently over the last year, many HYSA have very generous interest rates as of late. 

Also make sure your deposits are insured through FDIC or NCUA deposit insurance offered by most banks and credit unions. There are deposit limits, usually around $250,000 per institution. This insurance will get you your money back if the bank where your HYSA fails. It is rare, but it could happen!

Another important factor to look for is fees. Most HYSA don’t have any fees, but some of them will charge you for maintenance or transaction fees. Make sure the HYSA you select does not charge any fees. 

The next thing you should consider is the lock up period or transaction limits on your HYSA. In return for paying a higher interest rate, many banks will limit the number of withdrawals from your account to a few times a month, or not allow you to withdraw any money for a certain amount of time. 

Lastly, you will want to make sure your HYSA minimum balance is something you can make sure to not go below. Many banks will charge you fees for not keeping a minimum amount of money in your account.

In summary, selecting the right high yield savings account can be the difference between you and a few hundred dollars, so it is very important to take a few extra minutes to explore all of the options and select the right one for you. Considering all the factors listed above should be a great framework to use when selecting the right account. As always, if you have any more questions regarding HYSA or have any other financial questions, please stop by our office or schedule an appointment with the link below! 

 

https://financialwellness.utah.edu/

 

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