I use high-yield savings accounts to earn 200 times more on my money, and I can tell you the best ones have 3 specific features

The author is not pictured. RossHelen/Shutterstock.com

I have opened a few high-yield savings accounts over the years for different purposes, and I regularly recommend them to friends and family looking for the best place to store their hard earned money.

Unlike a checking account, I won’t touch my savings account that often. That means I don’t care about ATM fees or most transactional costs. Instead, I’m looking for an account that makes it very easy to access and manage your money.

If you’ve been considering starting to save or moving your savings to a new bank, here are four features that make a high-yield savings account worth trying:

1. A good account has an excellent interest rate

For most people, the most important feature to look at with any savings account is the interest rate. The whole point of a savings account is to safely store your money with interest. Because virtually all savings accounts are FDIC insured, you rarely have to worry about safety. Interest rates are a major differentiator.

As of this writing, there are multiple savings accounts that offer interest around or over 2%. For instance, Betterment offers 2.14% on its savings account (or 2.39% if you join the waitlist for its checking account), Marcus offers 2%, Wealthfront offers 2.32% (although that’s technically a cash account), and Ally offers 1.90% on its savings account.

Some of the biggest nationwide brick-and-mortar banks offer a paltry 0.01% APY. If you upgrade from an account like this, your interest rate will be about 200 times times higher – or more. That’s huge!

2. There should be no fees for regular use

After interest rates, the next place to look is minimum balances and fees. For a personal savings account, I would never open an account that charged me money on a regular basis. I grew up with accounts at major banks that added a charge if you didn’t keep a certain balance in the account (in addition to bad interest rates). I took my money and ran for the internet.

Some online high-yield savings accounts charge fees for uncommon activity like returned deposits, overdrafts, and wires. But if you use your account like a savings account (that means no more than six withdrawals per month) and don’t try to withdraw more than you have, you shouldn’t have to pay anything to keep this account regardless of your balance.

3. You should be able to make easy transfers to and from linked accounts

Online banking is the modern way to handle your money, but it isn’t new. The first consumer online banking launched in 1980. That’s nearly 40 years ago! While entering your own ACH transfers (an electronic funds transfer from one bank to another) was not always easy or free earlier on, today it should be considered a standard.

Ally Bank, for instance, allows you to link any external bank account in the US. You can send and receive funds at no charge. Ally is also a member of the Zelle network. This allows you to send and receive money from friends and family at participating banks with same-day transfers. That is also completely fee-free.

A great companion checking account is a bonus

You don’t have to keep a savings and checking account at the same bank, but if you are also on the hunt for a checking account to go with your high-yield savings, Ally’s ranks among my favourites in this category as well. Like the savings account, it is generally free to use for most people with no minimum balance and no recurring fees.

The Interest Checking Account from Ally pays either 0.10% (balances below $US15,000) or 0.60% (balances above $US15,000) and has no minimum balance or monthly fees. It doesn’t charge any ATM fees and reimburses up to $US10 per month from other banks in the US.


savings and retirement