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- I used to keep my money in a typical bank savings account earning next to nothing in interest.
- My husband convinced me to upgrade to an Ally High Yield Savings Account and I’ve never looked back.
- Summaries, 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 all of our financial portfolios. Just seconds after showing him that I was storing all my money in a savings account which was generating 0.01% APY, he reacted in panic.
I had no idea my money would grow faster if it was in a high yield savings account with a much higher annual percentage return.
Since I transferred my money to a high yield savings account at Ally where the APY is currently 2%, I have been able to grow my money and enjoy the benefits offered by my account that help me to earn more money each year. Here is how I maximize these features.
Insider Featured Savings Accounts
1.90% APY (as of 09/15/2022)
On the website of American Express National Bank (Member FDIC)
I exchange between the HYSA and a soft CD
During the pandemic, when the Federal Reserve lowered interest rates, the APY of my high yield savings account plummeted and the money in my account was earning less than before (it went from more than 2 % to 0.5%).
One of the great things about Ally is that they often have special, limited offers on high-interest CDs. I put a large sum of money, for the first time, in a CD that offered 2% interest, with no penalty for withdrawing the money.
Because it was so easy to transfer the money back and forth, I moved money in and out of the CD when my APY High Yield Savings Account went up.
When comparing these rates to my old bank, I noticed that the promotional APY and CD rates were at least 50% higher.
My account offers a roundup program
A benefit offered by Ally is a roundup program linked to my checking account. When I transact with my debit card, the bank automatically rounds the purchase to the nearest dollar, then transfers that money to my savings account once it reaches $5. For example, if I buy something for $6.50, the bank will take an additional $0.50 from my checking account and take note of it to eventually switch to my HYSA.
Although making transfers between my checks and my savings is something I can do manually, and do often, having this rounding program helps me accumulate even more money in my HYSA without thinking about it.
My HYSA compounds interest me on a daily basis
One thing I never realized about my savings account at my old bank was that the money in the account had monthly interest, which means any money deposited today will only grow a times a month, then the new balance will increase the following month.
My current bank compounds interest daily, which means that every dollar invested automatically begins to grow at a faster rate than it would if compounding occurred monthly.
Since I often deposit money several times a week, compounding this money daily helps me make more money each year.
I don’t have to pay any fees
With my old savings account, I was hit with an $8 monthly maintenance fee if I didn’t have a daily balance of $500. Although the fees seem low, they can add up over the year and hurt growth.
An advantage of my current HYSA is that there is no minimum amount that needs to be in the account and no monthly maintenance fees. It helps me keep my money in a place that grows daily, without having to worry about fees being charged along the way.