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- I used to keep my money in a normal bank savings account, which earned nothing but interest.
- My husband convinced me to switch to a collaborative high-yield savings account and I never looked back.
- Roundup, easy-to-access CDs and other features help me maximize my interest income.
Three years ago, before my husband and I were married, we sat down and shared our entire financial portfolio with each other. Within seconds of showing him that I have deposited all my cash in one saving account The one that generated 0.01% APY reacted with panic.
I didn’t know my money would grow that fast if it was in a high yield savings account With a very high annual percentage yield.
to my money a. since moving in High-Yield Savings Account at Ally, where the APY is currently 2%, I am able to increase my cash and take advantage of the perks offered through my account which help me earn more money every year. Here’s how I maximize those features.
I swap between HYSA and a flexible CD
during the pandemic, when federal Reserve Lower interest rates, the APY for my high-yield savings account fell, and the money in my account was earning less than it did before (it rose from 2% to 0.5%).
One of the benefits of Ally is that they often offer special and limited deals. High Interest Earning CDs, I put a large chunk of money in a CD for the first time, paying 2% interest, with no penalty for withdrawing the money.
Because it was so easy to move cash back and forth, I put money in and out of CDs when my high-yield savings account APY went up again.
Comparing these rates with my old bank, I noticed that the APY and promotional CD rates were at least 50% higher.
My Account Offers a Roundup Program
One perk Ally offers is a Roundup program linked to my checking account. When I transact with my debit card, the bank automatically rounds up the purchase to the nearest dollar and then transfers that money to my savings account once I hit $5. For example, if I buy something for $6.50, the bank will take an additional $0.50 from my checking account and note it down and eventually go to my HYSA.
While transferring between my checking and savings is something I can do manually, and often do, having this round-up program allows me to put even more money in my HYSA without thinking about it. Helps in depositing.
My HYSA compound daily interest
One thing I never realized about my savings account in my old bank is that the money in the account has monthly compound interest, which means any money deposited today will only grow once a month, and then that new balance will increase the next. Months will increase.
My current bank compound interest daily, which means that every dollar that is added automatically starts growing at a faster rate than if compounded monthly.
Since I often deposit money a few times a week, the daily compounding of that cash helps me earn more money every year.
i don’t have to pay any fees
With my old savings account, if I didn’t have a daily balance of $500, I was hit with an $8 monthly maintenance fee. While the fee seems low, it can increase throughout the year and take away from development.
One advantage of my current HYSA is that there is no minimum balance in the account and no monthly maintenance fee. This helps me keep my cash in a place that is growing on a daily basis, without having to worry about getting charged.