Episode Transcript
[00:00:00] Welcome to another episode of Financial Snickens. I'm your host, Alisa McCabe, and today we're going to be talking about investing in a high yield savings account. So the Federal Reserve raised rates to the highest level in more than two decades. Which is good news for savings accounts. So we're going to take advantage of today's high rates by opening a high yield savings accounts that is federally insured.
So when you go and you start searching for these high yield savings accounts, make sure that they're a member of the FDIC and don't forget. That they are only insured up to 250, 000 per account. So, investing one of these high yield savings accounts can be a great financial decision for small businesses for a whole bunch of reasons.[00:01:00]
Couple safety, security, easy accessibility. These high yield savings accounts are typically offered by very reputable financial institutions and it's also protected and they also have, um, convenient banking options. So they have safety because they're Insured by the FDIC. They have that security and they're easily accessible.
They have online options. You can transfer money to other accounts and you can access statements online. And this level of access accessibility can be crucial for day to day business operations because you never know when you're going to need that money. And that brings me to point number two, when you, when you invest in a high yield savings account.
You have liquidity, you have those funds available and for an emergency, [00:02:00] there are things that come up that are unexpected. And now you have access to that money, even though it's still earning a lot of interest. You also are getting higher interest rates and low risk. So if you think about this. This is my third point for investing in a high yield savings account.
You could invest your money in the stock market and that is high risk. But if you invest it in one of these savings accounts, the risk is very low, yet you're still getting a guaranteed return on it. It is really good and it protects your business capital. Also fifth reason, fourth reason for using a high yield savings account.
You could have short term goals and projects that you know you need to put money aside for. This is a great place to [00:03:00] hold that capital until you need it. Number five, They usually have minimal maintenance and very low
fees. So a lot of these high evil, high yield savings accounts tell you that you only have to deposit a minimum amount.
Some of them are 500. Some are as high as 2, 500 and they have no maintenance fees on them. So you are gaining every cent of interest and none of it's going to fees. Also, look When you do your research for a high yield account, look for accounts that offer a bonus. There are, these are going to be short term and, um, I just read an article where some banks Are going as high as 7 percent and at this moment in the fall of 2023.[00:04:00]
That's not anywhere that I've seen, but they are saying that they are becoming available and they're for very short periods of time. So keep your eyes out shop around for the best rate and for make sure to follow these points. Make sure they don't have any fees. Make sure they they don't have a minimum balance or they or they.
If they do have a minimum balance, or they have a requirement where you have to do a deposit, a direct deposit, that you follow those so you can take full advantage of having a high yield savings account. One caveat to look for, I did see in a high yield savings account that they only paid the interest on the first 500, which I thought was weird.
But. Read the fine print, make sure you're getting what you're investing for and good luck. I know you're going to do well and invest that extra money and don't let it be sitting in your checking account, getting next to nothing. [00:05:00] All right. If you want to talk more about saving that great capital from your small business, head over to our website, firststepsfinancial.
com and we can chat some more about this.
