High-yield savings accounts provide a safe place to keep your money for short or long term. Compared to traditional savings accounts, they typically offer a higher interest rate than would typically be earned on a traditional account. This is important if you are expecting your money to grow.
What should you check when opening a high-yield savings account?
High-yield accounts typically allow you to make an initial deposit as well as a monthly deposit. You can also usually make withdrawals or transfers to linked bank accounts.
High-yield savings accounts may be subject to monthly withdrawal limits, as are many traditional savings accounts. They may also have minimum deposit requirements and withdrawal fees or other fees – although they may be lower than a traditional bank or credit union. Therefore, check the institution you are considering so that you know the rules before opening this style of account.
When you’re considering opening one of these accounts, check out:
- What is the interest rate?
- How often is interest paid?
- Is money insured by the Canadian Deposit Insurance Corporation or credit union?
- Do high-yield savings accounts require a minimum deposit?
- What if you fall below it?
- Are there any monthly, maintenance, minimum balance, or other fees?
- How will you have access to your account?
- Through your other accounts?
- Through ATM?
- Through Online Banking?
- Through Mobile Banking?
- Can you only access your account online?
- How can you make a deposit?
- How can you make a withdrawal?
- Is there any withdrawal limit?
- What compounding does it provide?
- Can you keep it in the same institution with which you have other accounts?
- If not, how easily can you transfer money?
- How can you reach customer service?
You should also consider checking out different institutions as their rules may differ as well as what your institution offers for a traditional savings account, so you have a comparator. Then, consider what all of those factors are important to you and the best place to put your money. Your advisor can help you find the best account to reach your goals and how to save money in it.
