4 reasons to open a high-yield savings account while interest rates are down
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High-yield savings doesn't go out of style.
High-yield savings doesn't go out of style.
Despite the Federal Reserve's recent interest rate cuts, many high-yield savings accounts are still a good deal.It might feel a bit disheartening when the earning potential on your savings drops, but when the alternatives for your money are a traditional savings or checking account earning less than 1% interest - or worse, not saving at all - a high-yield savings account is your best option.
When it comes to high-yield savings accounts still offering over 2%, we think two robo-advisers have an edge: Wealthfront's Cash Account and Betterment's Everyday Savings. They allow unlimited transfers, require low minimum deposits, and levy no monthly maintenance fees, plus they can help you segue into robo-investing. Your money will grow while you're not even looking.High-yield savings accounts are especially useful when you have specific savings goals, whether for a down payment on a house, emergency fund, or dream vacation.
It's safer to put money you're planning to use in the next year to three years in a savings account than in investments, particularly when the economy is showing signs of slowing.How much and how often you save shouldn't depend on interest rates. In fact, an account's APY should just be a bonus. To build a habit of saving you have to create momentum. And if you can make it automatic, the easier it becomes.
The bottom line: If you're holding out for the perfect time to start saving, it will never come. You have nothing to lose by starting now.
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