Latest news with #savingsaccounts
Wall Street Journal
11 hours ago
- Business
- Wall Street Journal
Today's High-Yield Savings Rates for June 20, 2025: Up to 4.66%
Pay attention to restrictions that sometimes come with HYSAs. For example, some savings accounts limit the number of withdrawals and transactions you can complete in a month. Others might require a minimum deposit to open an account or have limits on your APY based on your balance. How traditional savings accounts work Traditional savings accounts work the same as HYSAs. However, unlike high-yield accounts that are often found online with no brick-and-mortar branches, traditional savings accounts are usually held at banks that have physical branches. In some cases, you can get above-average yields with more traditional accounts held at local credit unions and community banks with physical locations, but often the best savings rates are found with online-only accounts. Traditional savings accounts might have transaction limits, deposit requirements and tiered rates based on your balance. HYSA dependency on Fed rate The Federal Reserve meets eight times a year to announce its benchmark federal-funds rate (sometimes called the Fed rate). This is the rate banks charge each other for short-term lending. High-yield savings accounts are highly dependent on the Fed rate. When the target rate rises, savings yields generally rise as well. For savers, this can mean higher returns for letting their money sit at a bank or credit union. On the other hand, when the Fed cuts its benchmark rate, yields tend to fall. Savings yields can fluctuate regularly, but they are most likely to significantly change when the Federal Reserve announces a cut or increase of its benchmark rate.
Reuters
10-06-2025
- Business
- Reuters
Brazil's central bank chief signals imminent bridge solution for real estate financing
June 10 (Reuters) - Brazil's central bank governor Gabriel Galipolo said on Tuesday he expects to soon present a solution to finance the real estate sector, which is struggling due to a drop in deposits in savings accounts, historically its largest funding source. Speaking at an event hosted by banking group Febraban in Sao Paulo, Galipolo said a "bridge process" would be introduced to transition from the previous financing model to a new one. The move comes amid discussions with key players in the sector, including state-run lender Caixa Economica Federal ( the market leader in housing credit in Brazil, Galipolo said. During his remarks, Galipolo displayed a chart illustrating declines both in nominal and inflation-adjusted balances held in savings accounts, attributing the trend to the wide offer of more competitive yields through other investment options. "The more people have access to alternatives, and the more financial education they receive, the more natural it is to see, over time, this reduction in savings accounts balances," he said. "This compels the central bank and the financial system to seek alternative funding sources to enable a migration toward a new system, a new model." During periods of high interest rates, including currently in Latin America's largest economy, other fixed-income investments become more attractive than savings accounts, prompting withdrawals. Brazil's benchmark Selic rate stands at 14.75%, the highest level in nearly 20 years, following a tightening cycle that began last September to rein in inflation. Galipolo also called a proposed constitutional amendment before Congress providing for financial autonomy for the institution an "essential" agenda. Galipolo said the proposal, which the left-wing government of President Luiz Inacio Lula da Silva opposes, is not intended to give the central bank a blank check, but rather to provide tools for more effective supervision and regulation.
Khaleej Times
29-05-2025
- Business
- Khaleej Times
Follow these steps to make saving a hard habit to break
From paying your credit card bills to going out for dinner with friends, we do many things on a monthly basis that have become habits – they are part of our routine. So why not treat saving money the same way? Turn it into a monthly habit, maybe at the end of every month or whenever your salary comes through. In a few years' time, you will be glad you did. Habit forming Let's start by being realistic. If you have never saved before, it can be hard to start. A bit like going to the gym. You need to start saving and then quickly turn it into a habit. And developing a new habit doesn't need to take that long. For some tasks, they can become a habit in a matter of weeks, others take months. For saving money, you could make a note in your phone's diary as a recurring monthly event. Then you will be sent an alert and reminder to take action. From a psychological standpoint, saving every month trains your brain to prioritise future security over current spending. It makes budgeting easier, and your savings become a non-negotiable 'expense'. Make it easy Like with all habits, if they are simple and easy, then we are more likely to stick to them. Even better, what if you could automate saving money? For example, you could set a limit on your current account of Dh5,000, so that any amount above this is automatically swept into a savings account and earns a high rate of interest. Check with your bank to see if this facility is available. LIV has a number of innovative savings accounts such as Goal and Money Ahead. With Goal, you can earn up to four per cent interest a year if you follow a few rules, one of them being you need to transfer your salary into LIV. The Goal savings account has an option called 'Set & Forget' which sets automatic rules where you save a fixed amount every day, week or month. This sounds like a great way to automate your savings in case you forget. Eighth wonder of the world When you save money you earn interest which leaves you with a bigger amount. And then you earn interest on this bigger amount, interest on top of interest, or compound interest to use the correct term. Albert Einstein famously described compound interest as 'the eighth wonder of the world,' adding: 'He who understands it, earns it; he who doesn't, pays it'. So you want to be the one earning it, not paying it. This example should help convince you: Let's say you save Dh1,000 a month earning an annual interest rate of five per cent. In just five years, this will be grow to Dh78,000 and in 10 years it will grow to Dh155,000. Without any interest being paid and then not compounded year on year, your savings would only be worth Dh120,000 after 10 years. Now you can see the power of compound interest. And when is the best time to start saving? Yesterday. And the second best? Today. People often regret not saving sooner, but almost no one regrets having saved early in the lives. Best accounts Now you have been convinced that now is the right time to save, the next task is to find the best savings account. Some of the higher paying ones will give you upwards of four per cent but you need to read the small print to make sure you satisfy the terms. Some involve locking your money up for a set period, which you should be comfortable doing as you are starting a new long-term habit. Others may require a minimum balance to qualify for the higher interest rates. Banks do summarise the benefits and T&Cs but you still need to read them. ADCB Super Saver Account pays up to five per cent, which includes a base rate and a bonus rate, but read carefully the requirements needed to qualify for the bonus as it includes minimum balances you need to maintain. Emirates NBD will pay 4.5 per cent on new money going into its Plus Saver UAE dirham account while RAK Bank is paying six per cent interest but this is only available for three months. A simpler savings account is offered by Wio Bank which will pay you 3.75 per cent with no minimum amount or lock-in period. If you can lock your money up then you will get a higher interest rate – rising to 4.5 per cent.
Associated Press
13-05-2025
- Business
- Associated Press
The best places to park your short-term investments
As you sift among the various options for your short-term investments, keep these key items on your dashboard: yield, guarantees, liquidity and your individual situation. The short-term investments that promise the highest yields often come with at least some risk and/or constraints on your daily access to funds. It may be that you're just looking for the highest safe yield and don't care that much about liquidity. Or maybe having ready access to your funds is the name of the game. Also think through whether you value an ironclad guarantee or are willing to go without in exchange for a potentially higher yield. Some cash instruments are fully FDIC-insured, while others are not. On the short list of FDIC-insured investments are checking and savings accounts, CDs, money market accounts (not to be confused with money market mutual funds), and online savings accounts. Certificates of deposit CDs will typically offer the most compelling yields of all cash instruments, and they're also FDIC-insured. Yet there are a couple of caveats. One is that minimum deposits for the highest-yielding CDs might be $25,000 or even higher. There's also a trade-off on the liquidity front: You'll usually pay a penalty if you need to crack into your holdings before the maturity date. The longer the term of the CD, the bigger the penalty for cashing out early. Online savings accounts If you want daily liquidity, a decent yield, and FDIC protection, your best bet will tend to be a high-yield savings account through an online bank or a savings account through a credit union. The former offers FDIC protection, up to the limits, whereas credit union accounts are insured by another entity, the National Credit Union Administration. Money market mutual funds Money market mutual funds also offer daily liquidity and the convenience of having those funds live side by side with your long-term investments. But money market fund yields are still generally below those of online savings accounts today. Additionally, money market mutual funds aren't FDIC-insured, though in practice most funds have done an excellent job of maintaining stable net asset values. Don't confuse money market mutual funds with brokerage sweep accounts, though both are offered by investment providers. Interest rates on brokerage sweep accounts, which hold investors' cash that hasn't yet been invested, have ticked up a bit recently but are still well below other cash options. Stable-value funds Stable-value funds are another example of an investment that offers an often-decent yield in exchange for not checking the liquidity and guarantee boxes. Stable-value funds are only accessible inside of company retirement plans. They invest in bonds, so they're not FDIC-insured; to protect investors' principal, they employ insurance wrappers to help maintain a stable net asset value. Just bear in mind that stable-value funds carry drawbacks. Because you can only own such a fund within a 401(k), you'll pay taxes and penalties to withdraw your money before retirement unless you meet certain criteria. So don't think of a stable-value fund as an emergency fund unless you're already retired or close to it. Honorable mention: I Bonds In contrast with the preceding investment types, I bonds are the only safe investment vehicles that will guarantee to make investors whole with respect to inflation. I bonds are Treasury bonds that pay a fixed rate of interest as well as another layer of interest that varies with the current inflation rate, as measured by the Consumer Price Index. As attractive as that is, it comes with a few asterisks. If you redeem an I bond within five years of buying it, you'll forfeit three months' worth of interest. Purchase constraints are another drawback for large investors. ___ This article was provided to The Associated Press by Morningstar. For more personal finance content, go to Christine Benz is the director of personal finance and retirement planning at Morningstar.
Forbes
06-05-2025
- Business
- Forbes
High-Yield Savings Account Rates Today: May 6, 2025
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. Savings account yields are much higher than a few years ago Top rates may fall if the Federal Reserve cuts interest rates Online banks tend to offer the best yields available Rates on savings accounts are the same compared to one week ago. You can now earn as much as 5.84% on your savings. Shopping for an account where you can save for a rainy day or retirement? Here's a look at some of the best savings rates you can find today. Related: Find the Best High-Yield Savings Accounts Of 2025 Traditional savings accounts, called "statement savings accounts" in the banking world, have been notorious for paying paltry interest in past years, especially after the Great Recession. That's changed more recently, and you can find rates 10-times higher than those offered by traditional financial institutions if you opt for an online bank or a credit union. The highest yield on a standard savings account with a $2,500 minimum deposit amount within the last week has been 5.84%, according to data from Curinos. If you spot a basic savings account with a rate in that ballpark, you've done well for yourself. Today's average APY for a traditional savings account is 0.22%, Curinos says. APY, or annual percentage yield, reflects the actual return your account will earn during one year. It accounts for compound interest, which is the interest that accrues on the interest in your account. High-yield savings accounts often pay considerably more interest than conventional savings accounts. But the trade-off is you may have to jump through some hoops to earn that higher rate, such as becoming a member of a credit union or putting down a large deposit. On high-yield accounts requiring a minimum deposit of $10,000, today's best interest rate is 4.88%. That's about the same as last week. The average APY for those accounts is now 0.23% APY, unchanged from a week ago. On high-yield savings accounts with a minimum opening deposit of $25,000, the highest rate available today is 4.40%. You'll be in good shape if you can find an account offering a rate close to that. The current average is 0.24% APY for a high-yield account with a $25,000 minimum deposit. Start by comparing the best yields available on the market. There's no point in opening a high-yield savings account if you're not actually earning a high yield. But the interest rate shouldn't be the only factor you take into account. Consider whether a prospective account has a minimum deposit - and if you can meet it. You'll also want to watch out for fees. Savings accounts can come with monthly maintenance fees, excess transaction fees (if you make more than a certain number of withdrawals in a given month) and other pesky charges that can eat into your returns. And before you apply for a new account, explore the reputation and safety of the bank or credit union by checking the reviews, seeing what people have to say about customer service and finding out how the financial institution responds to consumer questions. Choose a bank that's insured by the FDIC or a credit union insured by the NCUA. Those agencies provide up to $250,000 in insurance per depositor and bank for each account ownership category. Curinos determines the average rates for savings accounts by focusing on those intended for personal use. Certain types of savings accounts —such as relationship-based accounts and accounts designed for youths, seniors and students—are not considered in the calculation. The best high-yield savings account pays 5.84% now, according to Curinos data, so you'll want to aim for an account that delivers a yield in that ballpark. But rates aren't everything. You want an account that charges few fees, offers great customer service and has a track record of being a stable institution. Savings yields are variable and can change depending on economic conditions or a bank's particular financial need. Usually rates are influenced by the federal funds rate, meaning that a bank tends to raise or lower its rates along with the Fed. Online banks and credit unions tend to offer the best yields because they can pass along savings from low overhead while also striving to attract new customers.
