Check those savings accounts right now! Over the last few years, we’ve had a tumultuous time in the financial sector. Investments have dropped, savings interest rates have dropped, and in general, a lot of people have experienced financial hardships. These hardships range from missed mortgage payments, defaulting on loans, losing jobs, and being unemployed. Many have been trying to regain their financial foothold. Today, times are changing, and interest rates are rising. If you have a savings account, this is good news, and let me tell you why.
What Is A Savings Account?
A savings account is a financial account you put money into for later use. You funnel money into this account based on your budgetary needs or long and short-term financial goals you have set. These accounts can be opened with any banking institution including regional banks and online institutions. Money in these accounts generally earns a certain percentage of interest. That means for every dollar that you input, a percentage of that balance occurs interest and pays out to you in the form of income. Most traditional savings accounts have poor earning rates, but high-yield accounts have better rates.
During the pandemic and most of last year, interest rates on high-yield savings accounts dropped significantly. The lowest my account dropped to was 0.5% APY. As our market economy has begun recovery and become more stable, those interest rates have increased. Today I received monthly emails with rate increases on my Marcus high-yield account. As of yesterday, I’m earning 1.90% APY. On an account with $16,000, that means earnings of about $25 a month compared to a few dollars. While it doesn’t seem like much, it adds up.
Interest rates are rising, and that’s good news for savers. Take advantage of it right now.
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Shatel Huntley has a Bachelor’s degree in Criminal Justice from Georgia State University. In her spare time, she works with special needs adults and travels the world. Her interests include traveling to off the beaten path destinations, shopping, couponing, and saving.