Saving more money is a popular New Year's resolution, but it's often easier said than done. Many find budgets difficult to stick with, and pinching pennies can sometimes lead to burnout. But fortunately, that's not the only way to boost your savings in 2024.
Switching to a high-yield savings account could also make a big difference, and there are other perks to changing banks as well. We'll look at these in detail below.
Switching banks could earn you hundreds in 2024
The best high-yield savings accounts today have annual percentage rates (APYs) hovering around 4.30% to 4.60%. That's enough to put $430 to $460 in your pocket in 2024 if you have a $10,000 initial balance. By contrast, many brick-and-mortar bank accounts pay you just a few pennies per year.
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It's important to recognize that high-yield savings account rates can fluctuate just like traditional savings account rates, so it's possible they could increase further or drop throughout the year. This will affect how much you earn in interest, and so will the size of your balance over time. But even if rates fall a little, you could still earn tens, hundreds, or even thousands of dollars with little to no effort on your part.
It could save you money on bank fees, too
High-yield savings accounts are typically available through online banks. They can offer these competitive yields because they don't have large and costly branch networks to maintain. They're also able to pass their savings onto customers in other ways, including reducing or eliminating common bank fees.
Maintenance fees in particular are almost nonexistent among online-only banks. These annoying fees can sometimes cost you more than you earn in interest at a brick-and-mortar bank. While many traditional institutions give you the opportunity to waive them, not all customers can. If your goal is to hold onto as much of your hard-earned cash as possible, it's best to go for a savings account that doesn't charge you to own it in the first place.
How to choose the right high-yield savings account for you in 2024
The interest rate is probably the most important consideration when choosing a high-yield savings account, but it's not the only one. As discussed above, you also need to pay attention to the fees the bank charges you. It should have a fee schedule on its site explaining what it can charge you for and how much you could owe. Contact the bank if you have any questions about this.
You should also look for an account that includes an ATM card if you hope to withdraw cash directly from your high-yield savings account. This is a little less common, though there are plenty of online-only banks that offer them. If you are OK with transferring cash to a local checking account before withdrawing it, this may not be necessary.
Customer service is also important, even if you don't plan to contact your bank often. You never know when you could run into issues with your online or mobile bank accounts. These are often the only way to access funds held in an online savings account since there are no bank branches. It's crucial to make sure you have access to helpful customer support when you need it.
And if you're still on the fence after comparing several offers, see if any of the savings accounts you're interested in offer a welcome bonus. This is a cash bonus you get after completing certain qualifying activities, like maintaining a certain minimum balance for a number of statement cycles. They're pretty rare among savings accounts, but they do exist and could serve as a tiebreaker if you're torn between two accounts.
Take your time with this decision. You'll probably have this account for many years, so you want to make sure you're happy with its features. Compare a few offers side by side before settling on one. Then, apply online so you can start making deposits and growing your wealth as quickly as possible.
These savings accounts are FDIC insured and could earn you 11x your bank
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