High Yield Savings Accounts
Have you been thinking about getting a high yield savings account lately? I am sure you might feel that you are pressed to cover the high gas costs, and that is understandable, but lets take a look into the world of high interest banking and see what the value is compared to the disadvantage.
What is the difference between a low yielding savings account and a high yielding savings account? Both seem to offer the same right? Well lets just reflect on what a bank account lie this one can do?
First of all it helps you become more disciplined about saving your money. The high interest rates of a savings account like this will allow your money to be compounding which is a big advantage, and it will allow you to hold off longer than normal from taking the money out because of the nature of the savings account and its maturity.
This type of a savings account can have just as many benefits as another, but can be a great source as an emergency fund should you run into hard times. Under normal circumstances, a family should be able to save about one tenth of the money they are bringing in from their jobs. This adds up to a lot, but once again this doesn’t seem as practical when gas prices are soaring. You might be asking yourself, Should I be saving my money right now? The answer is yes. As much as possible, since the economy feels very fragile right now it would be a good idea to have a reserve fund in case of hard times.
A high yield savings account is not for everyone. If you are living from paycheck to paycheck then just a regular savings account will suffice, and just making it a habit to put away as much money as you possibly can based on your budgets is going to make a huge difference later on.
All of these things help you to avoid one thing, and that is unmanageable debt which can slowly creep up on you and bite you in the rear end if your not careful. Saving up can give you a buffer zone so to speak and also provide peace of mind.
November 18th, 2008 at 6:17 pm
High yield savings accounts are great. I found smoe of the highest rates at online banks. I currently use an online savings account, but with the current bank crisis, I was concerned about the security of my money. I recently learned that the FDIC has temporarily raised its coverage through December 31, 2009.
FDIC now insures up to $250,000 per depositor. Individual and joint accounts are insured separately, so if you have both types of accounts, your total deposits can be insured up to $500,000; thats up to $250,000 in all your individual accounts and up to an additional $250,000 in your joint accounts.
source: VentureBankDirect.com/faqs.php