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What Is A High Yield Savings Account?

High-Yield Saving Account

A high-yield savings account is a type of savings account that offers a higher interest rate than a traditional savings account. Online banks and credit unions often provide these accounts, typically requiring no minimum balance or monthly fees. When choosing the right high-yield savings account, it’s essential to consider various factors to ensure you get the most out of your savings.  Below are seven key factors to consider when choosing a high-yield savings account:

1.    Consider the interest rate

One of the main benefits of a high-yield savings account is the higher interest rate compared to traditional savings accounts. However, interest rates can vary widely among different accounts. Remember that interest rates can fluctuate over time, so it’s important to regularly monitor your account to ensure you are still earning a competitive rate. Look for an account with a competitive interest rate to maximize your earnings.

2.    Look for fees

Some high-yield savings accounts may charge monthly maintenance fees or require minimum balances, which can eat into your savings. Typical fees to watch out for include monthly maintenance, transaction, and ATM fees. Be sure to read the fine print and understand any fees associated with the account. Look for an account with no or low fees to avoid losing money on your savings.

3.    Check the accessibility of funds

Choose an account that offers easy access to your savings without too many restrictions. Some high-yield savings accounts may limit the number of withdrawals or transfers you can make monthly, while others may offer ATM access or check-writing capabilities. Consider how often you will need to access your savings and choose an account that meets your needs for accessing your savings when you need it.

4.    Look for FDIC or NCUA insurance

To ensure your money is safe, choose a high-yield savings account from a reputable financial institution that is FDIC or NCUA insured for up to $250,000. This will protect your savings in case the institution fails.

5.    Consider the institution’s reputation and stability

Research the financial institution’s reputation and stability before opening an account. Look for reviews from other customers and check the institution’s financial health to ensure you are comfortable entrusting your savings to them.

6.    Check for additional benefits or rewards

Some high-yield savings accounts may offer additional benefits or rewards, such as cash bonuses, high-yield checking account options, or ATM fee reimbursements. Be sure to weigh these benefits against any associated fees or restrictions to determine if they are worth it for your financial situation.

7.    Determine your financial goals and needs

Ultimately, your right high-yield savings account will depend on your financial goals and needs. If you want to build an emergency fund or save for a short-term goal, a high-yield savings account with easy access to your funds may be the best choice. If you want to save for a longer-term goal, a certificate of deposit (CD) account with a higher interest rate and a fixed term may be better.


Choosing the right high-yield savings account requires careful consideration of several factors, including interest rates, fees, accessibility of funds, insurance, institution stability, additional benefits or rewards, and your individual financial goals and needs.  At the same time, choose an account that offers good customer service and an easy-to-use online platform to make managing your savings as convenient as possible. Always compare savings accounts, and make decisions based on your research and financial needs.

  high-yield saving account

Key Takeaways

  • Consider the interest rate
  • Look for fees
  • Check the accessibility of funds
  • Look for FDIC or NCUA insurance
  • Consider the institution’s reputation and stability
  • Check for additional benefits or rewards
  • Determine your financial goals and needs