Two great savings accounts to start with
I grew up in a family where my father used to hide all his money under the rug and in the cabinets. According to the FDIC, the rate of unbanked latinx households was 16.2% in 2015 still! That may be hard to believe but it doesn’t have to be that way. So how can you get started with safely saving your money? You should utilize two options and those are high yield savings accounts and traditional savings accounts.
- A high yield savings account has interest rates up to 25 times higher than a regular savings account. That means your money grows while you sleep. It is best used to save for a big purchase like a home or car.
- A regular savings account of course has less interest and is a great place to store money you might need to withdraw quickly for an emergency (it can take a few days to withdraw money from a high yield savings account). You can also have and link a checking account as well and utilize that for direct deposit or just your day to day expenses.
Your regular bank may already have a high yield account but the best rates are typically at an online institution. There are many options you can look into for both and below I have some things to keep in mind when you’re doing your research.
- You should check to see if there is a minimum balance to open and maintain the accounts
- Dive into what the overdraft fees are for the institutions regular savings account
- Explore if there are any programs or special offerings if you’re a student or in a certain income bracket
If you just take this first leap you’ll be well on your way to managing your finances like a pro!
Do you have any specific high yield savings account you’d recommend or personally use?
Hi Grace!
Thanks for the comment. I personally use Barclays and they have a very easy to use mobile app. Ally Bank and Citibank have two of the highest rates at the moment. Any of the three would be a great choice.