Savings Grace
High yield! Imagine spending your hard-earned money on a new car from the dealership. Now, imagine the moment you drive the car off the lot, its value is instantly lost. This is called depreciation. Moreover, inflation causes money to react in the same manner.
Because of our economy here in the U.S., the value of the dollar is currently losing its value. This means that the money that you are receiving in your bank account is not worth what it is. So if you earn a salary, that salary does not match the market’s current value. However, there are ways to protect yourself while in a struggling economy and a savings account is one of them.
The Basis of a Savings Account
The basis of a savings account in modern times is to safely stash away funds that you do not intend to use anytime soon. The banks hold these funds while giving you access, provided that one day you will withdraw from the account the funds are in. Importantly, most adults should have a savings account. More importantly, most adults do not have a savings account. But why do we need a savings account?
The reasons why adults should have a savings account vary from person to person. However, a few of the main reasons are because of emergencies and opportunities. First, you never know when something might happen and that’s where the savings come into place. Next, you never know when an opportunity to invest may arise, and this is where your savings account comes into play.
Having a stash on the side is important in the above cases, however, there are opportunities to make our savings work in our favor. One of those opportunities is called a high-yield savings account. Keep reading to learn about what a high-yield savings account does!
What is a High Yield Savings?
A yield savings account is an account that has an interest rate as opposed to a traditional savings account. Furthermore, this type of account offers an average of 2% to 6% annual interest rate, while traditional may offer a whomping 0.1% interest rate on an account. Big difference right? Right!
The big deal behind having a high-yield savings account is having your money grow while it sits. Also, this can help lessen the effects on your account when it comes to inflation. While your money sits in a traditional account, it does nothing. However, a high-yield savings account will pay you an interest rate which raises your dollar amount.
Why You Should Have High Yield Savings
The point of a high-yield savings account is to assist in the growth of your stashed away funds. Keep in mind, that this is not a quick process. This type of account takes time and compounding. Depending on the amount of funds that you have in your account, you may or may not see a significant difference in your account. However, the art of gratitude may be practiced because traditional accounts do not pay much or anything.
Now, not all high yields are not the same so please do your research on what works best for you and your finances. There are many resources to help you such as CPAs or online assistance such as Nerd Wallet provides insightful information regarding various finance options. In fact, check out this article from Nerd Wallet, “The Best High Yield Savings – 2023’s Best Savings Accounts”. This will help you get the gist of options that may appeal to you and your CPA.
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Conclusion
Having a savings account is super important to have. It takes discipline and budgeting to make finances work to your benefit. Although this article harped on having high-yield savings, it is also important to have savings in general. Depending on your comfort and funds, a savings account may be all you need at the moment. However, keep in mind there is nothing wrong with earning some cash while you wait! So, take a deep dive and get organized, and as always… Nothing works unless you do. Bless!
Disclaimer
I am not a certified financial planner/advisor nor certified financial analyst nor an economist nor CPA or an accountants or lawyer. The No Hiatus Report not not finance professionals through formal education. We believe and take pride in a sense of freedom, satisfaction, fulfillment, and empowerment that I get from being financially competent and being conscious of managing income.
The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.
