Frugalnomics

Many people think that money market funds are a great way to invest money safely. These types of accounts usually give a lower annual percentage yield of around 2 in return for the reassurance that a consumer’s money will always be there should he or she want to withdraw it. While this is a good way to earn interest on money that may otherwise have been sitting in a checking account unused, consumers should realize that it is entirely possible to make more than the average 2 on on their money. A little bit of research will show that in most cases, high yield savings accounts will actually give higher rates of return. However, there are catches.

Commonly, actual brick and mortar bank branches will only offer high yield savings accounts to their best customers. Consumers have to go through many loops and face restrictions in order to obtain a better yield. These loops could include keeping other linked accounts active via the bank or having to transfer a set amount of money into the account each month. Additionally, there may be limitations on the amount of money that can be taken out of the account or the amount of withdrawals allowed per month.

Computer-savvy individuals will be glad to know that there is a way to free themselves of some of these restrictions. Banks usually charge fees to cover the time and effort it takes for employees to perform basic tasks such as maintaining or linking accounts for bank customers. Online banking hands these basic tasks to consumers to complete instead. This saves the bank money and allows for them to pass the savings on to online banking customers. This is why online high yield savings accounts tend to have fewer restrictions and limitations associated with them, making these types of accounts attractive to those who can comfortably handle online banking.