High-Yield Savings Accounts
In this article, we will discuss high-yield savings accounts and why you might want to consider using them.
High-Interest Rate Environment
The current interest rate environment can be good or bad, depending on what you are looking to accomplish. On the one hand, if you have accumulated cash and you are looking to increase the amount of interest that you receive, you’re in luck. On the other hand, if you are looking for a loan, especially if you want to purchase a new home, you are likely not a happy camper these days.
The New Norm
For this installment, we’ll focus on the bright side of things by talking about high-yield savings accounts and why you might want to consider utilizing them.
Long gone are the days when you were lucky if you could get a 2% interest rate on the cash built up in your savings account. There are several banks and credit unions now offering rates in the 5% APY range and above. By taking advantage of opportunities like this, you can let your cash on hand work a little harder for you compared to the available opportunities in recent years.
What Difference Does It Make?
For example, if you deposited $20,000 into a savings account yielding 5% and left it alone for 12 months, you would earn an extra $1,000. While this may not seem like a lot, at the end of the day it’s extra money in your pocket that you didn’t have before, so you might as well take advantage of it!
Think about it… that extra $1,000 could be used to take a weekend vacation, to pay down debt carrying a high-interest rate, to help fund an unexpected home repair that will inevitably pop up, or even just for extra pocket change to spoil the grandchildren!
Our Duty
From a practical perspective, making sure your cash is earning enough interest can help to combat the risk of inflation over time, which is something all of us have recently felt the effects of.
As part of our duty to bring our best ideas to you, your Wealth Manager or Financial Planner will likely discuss how these types of accounts may fit into your specific financial planning. Sometimes it’s the little things that can make a huge difference in the long run.
Don’t forget, we are here to help! If you have any questions about your current financial plan (or lackthereof), please reach out to our team to schedule your free discovery meeting at www.seedpg.com/contact
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