How High-Yield Savings Accounts Can Help You Save More

High-yield savings accounts are an innovative and secure investment strategy. If you have money to save that you don’t plan on using in the next few months or years, you can store it in one of these accounts and make a lot of money fast. But how can you use the money you save in a high-yield account?

How High-Yield Savings Accounts Actually Work

First, you establish a length of time to store your money in the account, such as six months or two years. You deposit at least the minimum amount, and your bank will pay interest for the agreed period of time. Then, when you decide to cash your certificate, you’ll receive your original investment plus interest. You can use these funds in a variety of ways:

• Save money for upcoming goals. Sometimes, a risky investment is worth the payout in the long run. But for specific savings goals, it’s essential to save your money in a secure investment. For example, if you’re saving up to buy a car, go on vacation, or throw a celebration like a wedding or graduation party, a high-yield savings account is a great way to do so.
• Store surplus funds. At various times, many people receive extra income such as stimulus checks or tax returns. Investing this money in different stocks and bonds can be a great strategy, but until you know where and how you plan to invest, storing this money in a high-yield savings account is a great solution.
• Create an emergency fund. You can’t plan for an emergency, but you can save for one. By depositing a lump sum into a high-yield savings account, you’ll have a secure fund that won’t fluctuate as market conditions change.

Types of High-Yeild Savings Accounts
Individual retirement accounts, or IRAs, are long-term savings solutions with higher earning potential than traditional ones. They have annual contribution limits and may be penalized for early withdrawal. However, they also provide tax benefits and ensure you have security in your retirement. 

Certificates of deposit provide the most significant earning potential because they have high interest rates. You determine your term's length, deposit your specified amount upfront, and then the bank pays interest each month. When you cash your certificate, you’ll earn much more than you can with a traditional savings account!

See how much you can make with a certificate of deposit from Horizon Bank today. Talk to an advisor today to learn more.