High-Interest Savings Accounts

High-interest savings accounts can be very beneficial in that they allow your savings deposits to grow at a faster-than-normal speed. Typically, saving accounts are not producing very much return these days, as interest rates offered by banks are generally quite low. But with the advent and popularity of the Internet, a number of online banks are paying significantly higher rates of interest than you'll be able to get at your local bank. Not only is this a better deal for you, but it also has the effect of making the other banks reconsider their rates in an attempt keep their existing customers and attract new ones.

When you open a savings account, even if it's a high-interest account, make sure that it carries low- or no risk and has minimal fees – or none at all. Sometimes accounts that look too good to be true actually are just that – by time you've added in all the accompanying fees and service charges. When dealing with high-interest savings accounts, you can often lessen the expenses by keeping down the number of transactions you make each month, because some banks charge a per-transaction fee.

In addition to fees, be sure to go over all the documents and read all the fine print before opening a new account. Get clarification as to when any newly-transferred funds will be available (different banks have different policies). Additionally, some banks offer special rates or incentives if you move all your accounts over to them. So, in addition to the high interest you're getting, you may also be eligible for other benefits. Also, with interest rates fluctuating as they do, you'd be wise to research a number of different banks – along with their trends – so you don't put your money into an institution that offers high initial interest, but lowers substantially it a few months later. This is often done just to get new customers in the door.

Another popular type of savings account offered by many banks is the high-yield savings account. These savings vehicles pay a higher annual percentage rate (APR) than that regular savings accounts. High-yield accounts may also require that you keep a minimum balance in the account at all times in order to continue to receive the higher rate of interest. Like some high-interest accounts, they may also limit your transactions per month or even require a certain daily balance amount, as well.

Many – but not all – of the banks that you'll find online which offer high-interest savings accounts will also have local branches in your area. But the online-only banks will typically offer higher interest rates because they don't have many of the overhead expenses that the other banks do. Regardless of which you choose, always do your research before you commit to any type of savings account. Read the fine print and know the requirements for the account, as well as a bit about the bank that you're going to be giving your money to. After all, they're your funds, and you need to know that they'll be safe.