High Interest Savings

Archive for December, 2009

Subsequent to the most volatile stock market crisis in history, high interest savings accounts gained substantial popularity.  Americans, who were concerned about preserving the fruits of their labor, are turning to the high interest savings (HIS) account to harvest the nest egg. By and large, these catalysts for saving money are renowned for offering liquidity. Nonetheless, the HIS is not intended for every consumer.

Repetitive Withdrawals

High interest savings  (HIS) accounts are not advisable for individuals, who are need to make perpetual withdrawals each month. Since banks are authorized to impose fees for withdrawals, easing the arbitrary limitations, a HIS is suitable for the individual, who adds funds on a regular basis.

Accountholders with fluctuating savings balances are generally an awkward fit for the high interest savings account holder. All banks require a minimum account balance. Accounts with insufficient balance requirements are subject to fee penalties.

Deposits over $250,000

The high interest savings account is not recommended for the saver who has more than $250,000. Since the Federal Deposit Insurance Corporation  (FDIC) is insuring deposits up to $250,000, any excesses would not be backed. As a result, divvying up the money and placing them into separate banking institutions, may potentially protect one’s savings from unusual investment market events. However, the FDIC plans to roll back the standard insurance coverage to $100,000 on January 1, 2014.

High Interest Saving Tip: Compare the following terms of service and provisions:  

• ATM Card Replacement – Mishandling
• ATM Deposits
• ATM Withdrawals
• ATM/Online Fees
• Bill Payment (online or by telephone)
• INTERAC Direct Payments
• International ATM Withdrawals
• Personalized Checks
• Personalized checks
• Preauthorized debits

 For additional resources about high interes savings  accounts, be sure to bookmark this site and post your financial questions below.

Although high interest savings accounts do not present the potential returns of a hedge fund, they emblematize a risk-free tool to grow a savings and retirement money. High Interest Savings.org compiled a short list of tactics to shop and save

Shop around for a high interest savings account.  Compare rates offered at major financial institutions to small banks. Bear in mind that the caveat involved with the high savings account is that if the economy weathers inflation, the value of your savings account may hindered.

Set the savings budget. There’s no need to wait for the annual bonus to fund the high interest savings account. Establish a daily, weekly and monthly budget. Try to reduce costs two to five percent to allocate regular deposits to the high interest savings account. Also, add any extra cash windfalls, multiplying interest savings to earn dividends. 

Turn sales into opportunities to save. Incentivize the desire to purchase bargains and cut costs, feeding the nest egg with the amount saved from each trip to the grocery store, shopping spree– ultimately setting aside substantial cash reserves. 

Stay on target. Don’t be tempted by associates, who seem to be on a spending bender. Exercise financial control, adhering to your financial plan to make regular deposits. 

Open a high interest savings account at a bank backed by the Federal Deposit Insurance Corp. (FDIC).  Until Dec. 31, 2013, the FDIC will insure accounts with up to $250,000. (In 2014, the standard insurance amount will revert back to $100,000).

Where to find a high-interest savings account? Online high interest saving products are in ample supply. Remember to evaluate the terms and yield of any savings account, as they tend to be capricious in nature.

What are high interest savings accounts?

High interest savings accounts are merely cash rewards for stockpiling money at the bank or other financial institution. Banks use the cash reserves of high interest saving accounts to fund a small portion of other loans, Based on those interest fees, the bank extends the interests earned to the high interest savings accountholder.

Important note: High interest savings accounts are a catalyst for earning a high yield interest or return on reserved finances (savings).

Are high interest savings accounts risky?

No, high interest savings accounts are not risky per se. Since, the Federal Deposit Insurance Corp. (FDIC) insures high interest savings accounts with balances up to $250,000, the monetary tool offers a modicum of financial security. (However in 2014, the FDIC plans to revert the standard insurance amount to $100,000).

Are there any advantages for having a high interest savings account?

In terms of definitive liquidity, high interest savings accounts outperform certificates of deposits, imposing little risk.

What are the drawbacks of high interest savings accounts?

High interest savings accounts are the mainstay for liquid interest bearing accounts.  However, if inflation transpires, the money dwindles in purchase power.

Additionally, banks may charge high interest savings accountholders a penalty for funds below minimum account balance requirements. Federal guidelines allow customers to make as many as six transactions of transfers and withdrawals each month. Once the arbitrary withdrawals exceed the limitations, it is legal for financial institutions to impose fees.

What are the eligibility requirements for opening a high interest savings account?

The vast majority of high interest savings accounts require a higher minimum deposit to open the account.