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What is a High-Yield Savings Account?
Believe it or not, being a savvy saver is pretty simple. It involves a little preparation and understanding all your options when it comes to saving funds for the future — whether you are putting money aside for a rainy day or planning for a white-water rafting trip next summer.
High-yield savings accounts can help anyone who wants to be ready for what's next.
A high-yield savings account, such as the Citi Accelerate Savings Account, is a savings account that typically offers a higher interest rate to help you earn more with your savings, as compared to standard savings accounts. High-yield savings, also known as a high-interest savings account, can simplify the savings process and help you reach your goals in less time.
What are the benefits of a high-yield savings account?
High-yield savings accounts can make it easier for you to reach your personal and financial goals by increasing the speed at which you grow your savings.
The main thing that defines high yield savings accounts are their interest rates. Compared to standard savings accounts, high yield savings accounts will often have a higher rate of return on your deposit. That's why it pays for consumers to compare high interest savings accounts and seek the best rates for their situation.
In addition to higher interest rates, high-yield accounts are great because:
Most high-yield savings accounts make it easy for you to withdraw funds without requiring a longer-term commitment, such as a Certificate of Deposit (CD) or Individual Retirement Account. Some high-yield savings accounts may, however, have limited access to funds as compared with standard savings accounts.
They are also a safe way to save. High-yield savings accounts are FDIC insured up to $250,000 per depositor. To learn more visit www.fdic.gov.
If you're looking to ramp up your savings efforts, higher interest rates can help your money make more of an impact in less time.
You can view Citi's savings products if you'd like to explore your options.
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What to look for when opening a high-yield savings account
When comparing high-yield savings accounts, interest rates are a key factor. However, you should also take into consideration any monthly maintenance fees. And, in comparison to many basic savings accounts, high-yield savings accounts often have higher requirements for opening deposits or monthly minimum balances.
Even if an account's requirements fit your needs today, your financial picture could change over time. Consider a high-yield savings account that allows the option to link balances across all eligible accounts, such as checking or CDs. Whether you choose a conventional savings or high-yield savings account, it's always smart to pay attention to the details and requirements for your banking relationship.
Some key features to review when selecting a high-yield savings account are:
- Overall interest rate/annual percentage yield
- Requirements for opening, such as minimum deposit or current banking relationship
- Requirements for maintaining the account, such as minimum ongoing balance
- Fees for withdrawals, transfers or dropping below a minimum balance
- Ease of withdrawal, including ATMs, branches and digital options
- Automatic deposit and overdraft protection
When should you open a high-interest savings account?
The short answer? Probably now.
A great time to open or add more money to a high-yield savings account may be after your next pay raise/bonus at work, when you have a specific goal in mind (the latest smart phone or a trip abroad), or if you want an account that provides instant access to your savings.
Can high yield savings accounts' interest rates change?
Yes, almost all high yield savings accounts have variable interest rates. That means they can fluctuate over time, although usually these changes will be tied to market rates — which means most banks will be increasing or decreasing their rates similarly.
To lock in a guaranteed interest rate for an extended period of time, consider a CD instead. CDs offer a fixed interest rate, however you typically won't be able to access your funds for the length of the CD term, which can range from three months to five years. No Penalty CDs from Citi can be an alternative if you are still looking for a fixed rate but want more flexibility when it comes to accessing your funds.
Who should open a high interest savings account?
A high-interest savings account can benefit anyone who either has some savings or is starting to build their savings. High yield savings accounts are great places to put an emergency fund or save towards a short-term goal such as a wedding or move. Just be sure to compare high interest savings accounts and choose one where you meet the minimum deposit requirement to get the high interest rate and avoid any account fees.
How to open a high-yield savings account
After you've pinpointed the best account for your needs and interests, applying is simple. You can visit your financial institution's website to find out if a high-yield savings account is available and follow the online instructions.
Applicants for a Citi savings account must be a U.S. citizen or resident and at least 18 years old. You'll need to provide a physical U.S. address and Social Security number. The process takes about 15 minutes or less and can help you start saving right away.
Citi allows you to open a high-yield savings account online or over the phone. Other accounts may be available in a branch. See how much you can earn with a Citi savings account today.
The article content provides general information about banking products, however consumers should refer to the terms and conditions financial institutions provide for various products.
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