3 smart reasons to open a high-yield savings account this April
When looking for a safe and effective way to grow your money, a high-yield savings account is considered one of the better options. These accounts come with higher rates than many other savings vehicles, allowing savers to access their money as they would with most other types. But the timing behind a potential account opening needs to be right.
If you were to open a high-yield savings account in 2020 or 2021, for example, when the interest rate climate was significantly lower, your earnings would have been minimal. But the interest rate climate of recent years has been more favorable for these accounts, although that window of opportunity could soon be closing. With that understanding, it can make sense for many to open a high-yield savings account this April. Below, we'll break down three smart reasons why you may want to act now.
Start by exploring your high-yield savings account options here to see how much more you could earn.
3 smart reasons to open a high-yield savings account this April
Here are three reasons why savers should consider opening a high-yield savings account this month.
To earn more on your money
With interest rates on high-yield savings accounts approaching 6% right now, it's a great time to earn more interest on your money with these accounts. Compared to the minimal 0.47% most savers can secure with a traditional savings account, you're essentially losing money by not making the switch to a high-yield savings account instead. That said, rates on these accounts are variable and subject to change with the economic climate, so it makes sense to earn these high returns now while they're still available.
See what high-yield savings account rate you could secure here today.
To take advantage before rates fall
The prospect of interest rate cuts has loomed for months but is particularly high right now. With continued success toward lowering inflation, the Federal Reserve could cut its benchmark interest rate range as soon as June, meaning interest rates on high-yield savings accounts will drop in tandem. Even a hint at interest rate reductions to come could affect what lenders are willing to offer savers today. It makes sense, then, to take advantage of high rates while they're still available by opening a high-yield savings account this April.
To maintain the flexibility you're accustomed to
If you're searching for the highest interest rate possible this April you may be better served by opening a certificate of deposit (CD) account instead of a high-yield savings account. But that higher rate will come with a cost - you'll need to be willing to keep your money untouched for the full CD term or risk getting hit with an early withdrawal penalty for premature access.
But high-yield savings accounts don't come with this restriction, allowing you to maintain the flexibility you're accustomed to with your regular savings account, all while earning that higher interest rate. This is particularly important for those who already do most of their banking online. Since many of the best high-yield savings accounts can be found with online lenders, the transition from a regular account to a high-yield one can be seamless.
The bottom line
With interest rates on high-yield savings accounts still high right now - but with the potential for rate cuts strong for later this spring and summer - this month could be a smart time to act. By opening a high-yield savings account this April you'll immediately start earning more on your money and you'll maintain the flexibility you're already accustomed to with your regular savings accounts.
