Earn Money with High Yield Savings Accounts

2007-03-08 10:33:40

( Financial )



High yield savings accounts are also known as premium accounts, or money market savings accounts which provide you with a higher interest rate, or annual percentage yield (APY), and can be opened at any bank. The funds that are deposited in such an account are invested by your bank, which also collects on the returns on the investment, in exchange for higher interest rates. Some people worry about the security of their funds because they feel that they have no control over the money that is deposited. One should note that the funds that are deposited into high yield savings accounts are used to make safe investments through the purchase of treasury bills, certificates of deposit, or other financial instruments.

Some reputable financial companies can even offer you a higher annual percentage yield than a bank; however, you run the risk of losing all of your invested money if the company files for bankruptcy as they are not insured. In contrast, the high yield savings accounts you open at a bank are insured up to a certain limit, and therefore provide you with the protection you need.

Not everyone can set up high interest savings accounts: it is usually offered by banks to certain customers who can afford to provide a high initial deposit amount, can maintain a high bank balance, do not require the money placed into the account to pay for everyday expenses and keep a certain business relationship with the bank. In addition, with high interest savings accounts, you are only allowed a number of withdrawals per month.

Internet savings accounts or online savings accounts can be opened by individuals who do not qualify for high yield savings accounts. These accounts offer higher annual interest rates than a traditional bank account because it requires less manpower and documentation to maintain your account. There is no service for an ATM card, nor will you be provided with a checkbook. If you need to make any withdrawals, you can make fund transfers to your traditional checking account which can take several business days. There are no service fees for such transactions.


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