We are in turbulent times right now. Some people are out of work and unable to maintain their lifestyles. Some people are taking this time to better themselves financially and otherwise. Some people are hopping into the market to take advantage of new opportunities. No matter where you fall, we all can use this time to change our savings habits and goals. If you cant stomach the stock market but only have a simple savings account, here is why high-interest saving is for you.
Safer than the Market
The current state of the stock market is a roller coaster. In March, the market had a drastic decline. Now the numbers are starting to go up, but we are not out of the clear. Most investments are down at least 50% from the highs before the market decline. This is true for the travel, entertainment, and real estate sectors. With such huge drops, the market can be scary. You can win big but lose fast. If you cant tolerate the market swings, parking your cash in a high-interest account is best. You can never lose the money you put in, only gain more.
Better Intrest than a Traditional Account
If you have your money parked in a regular account, it’s netting you next to zero profit. In fact, most banks offer an interest rate closer to 0.09%. That equates to pennies earned in your account. When you go with a high-interest savings account, you can generate around 1.30% APY. Some rates have fallen since the fed rate cuts, but they can fluctuate up and down. The difference $1000 makes in each of these accounts is 9 cents to $13 annually. If you chose a super high-interest account, savings can be around 5% apy.
What Accounts are Available
There are many high-interest savings accounts on the market. I currently have a Marcus by Goldman Sachs account. It has a 1.05% APY, down from 1.70% pre-Covid-19. Other highly mentioned accounts include CITI bank, Ally Bank, and Citizens Access. For super high-interest rates, you can check out WesternVista Credit Union Rewards, TAB Bank, and Blue Federal Credit Union. For a complete list of high-interest savings, options click here. I hope you found the information useful and found the answer to why a high-interest savings account is for you.