Nearly every bank pays you interest when you deposit your cash with them. Yay for free money! Well, don’t get too excited. Did you know that the national average interest rate for a savings account is around 0.06 percent, according to the FDIC?
For example, if you deposited $1,000 into a savings account that earns you 0.06 percent interest, you would make approximately $0.60 by the end of the year. Not much, right? Thankfully, there are high-yield savings accounts that have far better interest rates than the national average. So, what is a high-yield savings account, exactly?
What Is a High-Yield Savings Account?
A high-yield savings account is just like your traditional savings account at a bank that earns you interest. However, high-yield savings account rates are higher than the national average – sometimes 7.5 times more!
Although high-yield savings account rates are higher than the average, they will vary. They can range anywhere from 0.30% to 0.70%. So, if you deposit $1,000 into a high-yield savings account that earns you interest at a rate of 0.40% APY, you could make $4 at the end of the year. See the difference? Trust us; it adds up.
Rates like these will earn you more money than what most big-name banks provide. At the end of the day, though, you may be wondering: Is it worth having a high-yield savings account?
Benefits of Having a High-Yield Savings Account
Usually, the more money you save, the more you will earn. Yet, if you start with a small deposit, interest payouts may feel slow and pointless. Still, there are several benefits to having a high-yield savings account – especially if you go with one of the top high-yield savings accounts (more on this later). Let us explain some of the reasons.
Earn Interest on Money You’re Not Spending
With inflation rising, the value of your unspent dollars continues to decrease. Allowing your savings to sit and earn interest is the best way to keep the value of your money up.
Most high-yield saving accounts have zero-to-low fees when you open an account. On the other hand, many traditional banks will charge high fees if you fail to maintain a minimum balance or meet certain thresholds.
Earning interest on interest is another excellent way to grow your savings. Many of the top high-yield savings accounts will compound interest for you automatically.
Protecting your money is a big deal. That is why nearly every bank, including a high-yield savings account, is insured by the Federal Deposit Insurance Company (FDIC).
If your local bank fails you, the FDIC will intervene. This insurance policy ensures that you won’t lose your money. Currently, the FDIC will cover up to $250,000 of your deposited funds if something unexpected happens to your bank.
Why PrizePool Is the Best High-Yield Savings Account
Overall, there are not too many downsides to opening a high-yield savings account other than interest rates fluctuating from time to time, ACH transfers could take up to 1 to 3 days, and not all banks are the same. Some have higher fees or minimum balance requirements. Another problem is that most do not incentivize you to save.
At PrizePool, we like to incentivize people to save by entering their names into a weekly lottery for every dollar they deposit. The risk? None. Allow us to explain.
Individuals will receive one ticket per dollar saved with PrizePool each day. So, if a person has $10 in their balance, they will earn a total of ten tickets each day. If they have $100, they will accumulate 100 tickets each day and so on.
At the end of every week, tickets get automatically entered into a drawing for over 4,000 cash prizes. Individuals even have a chance to win the grand prize of $25,000, which occurs every four weeks! The idea is simple: The more you save, the greater the chances are you will win a cash prize.
So, what happens if you win a cash prize? If that’s the case, congratulations! Any prize that you win will be deposited into your PrizePool account for you. Additionally, your winnings combined with your deposits will help you to accrue more tickets, so you can potentially keep winning prizes each week. Also, both your funds and cash prizes will earn you a savings bonus of 0.30% APY interest, growing your savings faster than any traditional bank.
On the other hand, what happens if you don’t win a cash prize? Well, here is what makes us one of the best high-yield savings accounts: If you don’t win a cash prize, you still get to keep your money and earn a savings bonus of 0.30% on funds you have saved. You will never lose your money; your money is yours and yours to keep, regardless of whether you win or not. Think of PrizePool as a safety net for you. Plus, you will continue receiving tickets each day. That means you will still have a chance to win a cash prize at the end of each week. Secured and insured, there is no charge or fee and no minimum deposit requirement. You could start with a dollar if that is all you have.
At PrizePool, we want to make it fun and worth your while to have a high-yield savings account. Download the app today and get rewarded for saving money!