High-yield savings accounts, which offer significantly higher interest rates than conventional ones, have become increasingly popular among savvy savers. Among the high-yield accounts currently available nationwide, Poppy Bank leads the field with an impressive 5.50% annual percentage yield (APY), nearly twelve times the nationally averaged savings account rate of 0.47% APY.
This is part of daily rankings carried out through the independent evaluation of more than 100 banks and credit unions accessible to customers nationwide since 2019. Although rankings primarily focus on the highest returns, they also examine critical account features such as minimum opening deposit, ongoing balance requirements, and fees.
In 2023, savings account rates reached their highest in over twenty years, driven by the Federal Reserve's rate-hiking campaign that began in March 2022 to combat inflation. However, in current meetings, the Fed has decided to keep the federal funds rate steady, consequently causing savings rates to gradually decline.
Potential earners should note the difference between "money market" accounts and savings accounts. Money market accounts traditionally offer check-writing privileges while savings accounts do not. Despite the names, none of the top-ranked accounts offer check-writing privileges.
The process of opening a high-yield savings account is straightforward. First, conduct thorough research on the best possible account for your needs considering factors like annual percentage yield (APY), minimum balance requirements, and other terms and conditions.
Once you decide on the best account, you can open it online. You may have to wait a day or two for your account to be fully operational. Once it is, you can set up online banking for your convenience.
High-yield savings accounts, although not without the occasional drawback, present an excellent opportunity to grow your savings at a much faster rate than a regular savings account. It would be best to consider opening one if you have surplus savings and are comfortable with online or mobile banking. Ultimately, the decision comes down to personal preference and financial goals.