A high-yield savings account is the best way to grow your money without risking a dime. But you need savings to earn interest, and for many of us, consistently putting away money is the tough part.
Business Insider recently named the best high-yield savings accounts, and one of our winners, CIT Bank, has a solution. The online bank's Savings Builder account currently offers an annual percentage yield (APY) of up to 1.85%, one of the highest rates we saw among national and online banks. But in order to earn that APY, you either have to save automatically or maintain a high balance.
Here's how it works: You need at least $100 to open a Savings Builder account. Every new accountholder earns an interest rate of 1.83% for an introductory period of a few weeks. If you set up an auto-deposit of at least $100 a month or keep your daily balance above $25,000, you'll earn the top APY of 1.85%. If you fail to do either, your APY will drop to 1.17%.
If you're serious about saving - whether for an emergency fund, next year's summer vacation, a down payment on a home, or your wedding fund - the Savings Builder account is a great tool to create momentum.
On top of rewarding you for consistent savings, the account doesn't impose any maintenance fees and allows mobile check deposit via its app. The account does limit transfers and withdrawals to six per statement cycle, but that's a federally mandated rule you'll find on nearly all savings products.
Now is a good time to open a high-yield savings account
It's important to remember that interest rates on high-yield savings accounts are variable. You don't lock in a fixed interest rate on this account, or any other savings account, like you would on a certificate of deposit (CD). When the Federal Reserve cut interest rates three times between July and October, earning potential on savings accounts fell dramatically. But that doesn't mean it's a bad time to save money.
In fact, there are a few good reasons to open a high-yield savings account while interest rates are down, including that you're still earning 20 times more than a traditional savings account. Plus, if you start the habit of automatically saving now, you'll be ready to earn even more on your savings when rates inevitably go back up.
If you've already built up a cash reserve elsewhere, you may be able to earn even more rewards with the Savings Builder account. Now through December 31, CIT Bank is offering a $150 bonus if you open an account and deposit $25,000 to $49,999 from an external bank within 15 days, and keep that balance for 90 days. If you deposit more than $50,000 during the funding period, the bonus increases to $300.
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
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