Most people are aware that saving a percentage of your salary is good practice to build wealth. But the more financially savvy people know a secret – your savings account is one of the easiest and most low risk ways to make your savings work for you and help you to build wealth.
With interest rates at an all time low in major US banks (with the higher ones offering a measly 0.6% APY and many offering only 0.1% APY), you might be wondering how this is possible. The answer is a simple one; instead of opening a standard savings account, open a high interest savings account instead. Below you will find out how opening a high interest savings account can help you to build wealth through your existing and future savings.
High Interest Rates Mean You Make Money from Your Money
The average high interest rate account has an APY upwards of 1.8%. This is one hundred and eighty times the APY you will get from most high street banks. That means that for every dollar you can earn in interest from a big name bank, you could instead be earning $180.
So if you deposit $10,000 into a high interest savings account, but the end of year one, you’ll have made $180. While this doesn’t sound like a huge amount for a year, it’s money for nothing and it’s $179 dollars more money in your pocket.
You Have the Flexibility of a Standard Savings Account
High interest savings accounts, unlike CDs, don’t penalise you for transactions and withdrawals. You can make up to six transactions per month with a high interest savings account.
You can link you high interest savings account to your current account so you can easily transfer money in and out within seconds from your laptop or cell phone and you can check your balance anytime on any of your devices.
High Interest Savings Accounts Are Easy to Open and Maintain
To open a high interest savings account, start by researching the options available to you. While some high interest savings accounts require you to keep your balance high, many others will allow you to open the account with minimal money and pay in small amounts as and when it suits you.
Once you find an account that meets your needs, simply fill in the online application form and wait to be approved. As soon as you’re approved, you can then link your current account and transfer the money to the high interest savings account.
If you’re interested in making your money work for you, then a high interest savings account is definitely the way to go. You will hit your savings goals much faster when your account is working for you and adding dollars to your balance without you having to lift a finger.