There aren’t many financial sure bets lately. With the benchmark interest rate the highest it’s been in 22 years — and inflation cooled but still humming along in the background — many Americans find themselves with limited options. Uneven stock market performance and a slightly higher unemployment rate haven’t helped either. Amid this environment, it behooves most adults to take a closer look at their investments — and look for cost-effective ways to grow their savings.
Fortunately, there are still some ways to earn great returns on your money with minor risk and work on your behalf. Two of the best ways to do this now are by opening a high-yield savings or certificate of deposit (CD) account. By depositing money into a high-yield savings account, in particular, savers can make exponentially more interest than they would have just a few years ago. In fact, there are multiple compelling reasons why savers may want to deposit $1,000 into a high-yield account today.
Explore your high-yield savings account options here now and start earning more money.
Why you should deposit $1,000 into a high-yield savings account now
Here are three reasons why savers should strongly consider depositing $1,000 into a high-yield savings account today.
Interest rates are higher
Interest rates on high-yield savings accounts are higher than they’ve been in years. Savers can easily find accounts with rates of 5% APY or greater right now, particularly if they use an online bank or lending institution. Compared to the low 0.43% most savers are getting with their regular account, they’re essentially losing money by not transferring some (or all) of their funds into a high-yield savings account.
How much more money could you make? By depositing $1,000 into a regular savings account you’ll have grown your bottom line by just $4.30 after 12 months. But with that same amount in a high-yield savings account your bottom line will have grown to $1,050. And that’s at the 5% rate. If you shop around and do your research you may be able to find an account with a higher rate than that.
Start shopping for high-interest-rate savings accounts here now.
Interest rates could rise higher
After a pause in interest rates in June, the Federal Reserve raised them again later in the summer. And, they may not be done yet. While indications surrounding a September rate hike are unclear, chances are good that they will rise yet again before the year is over.
This is good news for high-yield savings accounts, as these account types come with variable interest rates. This means rates will rise as the benchmark rate heads upward. So account holders will be best positioned to take advantage of any future rate hikes. Compared to a CD, which locks the account-holder in at the rate the account is opened with, this makes opening a high-yield savings account now an especially beneficial move.
You won’t lose any flexibility
High-yield savings accounts operate exactly like regular savings accounts do — just with a higher interest rate. So if you’re concerned about losing flexibility, don’t be. These accounts can provide all of the same services you’re already accustomed to.
The only (small) caveat is that the best rates and terms will generally be provided by online banking institutions — not your local, physical bank branch. But with so many online lenders providing all of the same accommodations your regular bank does (many even provide an ATM card for easier access), it’s generally worth opening, even if it’s just with a $1,000 deposit to get started.
Learn more about your high-yield savings account options now.
The bottom line
With few ways to save and grow your money today, high-yield savings accounts are one of the few sure bets worth pursuing now. By depositing just $1,000 into an account, savers can make many times more interest than they would have by leaving it in a regular account. And interest rates could rise higher, making these accounts particularly beneficial now as rates could soon be hiked up again. Finally, savers won’t lose any flexibility by opening a high-yield savings account, as they operate in all of the same ways the regular savings account you’re already used to does.
