High-yield savings accounts allow you to earn among the highest possible yields and access your cash at any time. To maximize your return, though, you’ll need to employ a few strategies.
1. Follow the Market
If you want to earn the best possible yield, you need to stay nimble. The rates you earn are influenced by the short-term rate, known as the federal funds rate, which is set by the Federal Reserve. Moreover, banks tend to offer lucrative options in order to attract more deposits.
“Rates fluctuate regularly, so it’s crucial to set regular calendar reminders, watch the Fed rate and monitor these investments to ensure your money is always working for you in the best possible way,” said Tim Nargassans, financial services executive and data/AI expert.
2. Save for a Purpose
It’s much easier to save with a goal in mind—such as a kitchen remodel—than saving for the sake of saving. To that end, you can open a series of high-yield savings accounts, each with its own purpose. The closer you get to meeting your savings goal in each account, the more likely you’ll be to keep going.
“Putting away money in multiple high-yield savings accounts associated with specific goals helps you hit your targets faster,” said Michelle Winterfield, co-founder and CEO of Tandem, a financial app for couples. “Not only are you isolating your savings into buckets, but you’re earning sizable interest while the money sits there.”
3. Embrace Restrictions
Many savings accounts, though not all, limit the number of withdrawals you can make in a month without paying a fee. This can feel like a burden to some, but it can be a necessary limitation for those who struggle to stay within a budget.
“Since high-yield savings accounts frequently impose limitations on withdrawals, [they] introduce a gentle hurdle, prompting you to pause and consider the purpose behind accessing your savings,” said Megan McCoy, an accredited financial counselor (AFC®) and assistant professor at Kansas State University’s Department of Personal Financial Planning. “This safeguard encourages thoughtful deliberation before tapping into funds you should be setting aside for future goals.”