A high yield account is a deposit account offering higher APY (annual percentage yield) than traditional deposit accounts. High yield accounts are available through both brick-and-mortar and online banks. Such an account requires one to keep a higher initial deposit and maintain a high balance. High yield savings accounts are among the most recommended investments.
Banks that Offer High Yield Accounts
Both online banks and those with a physical setup may offer high yield accounts.
Online banks: As these banks have no major expenses such as those on cashiers, rent and paperwork, they pass the savings to their customers via high yield accounts, offering higher interest.
Brick-and-mortar banks: These banks do not have as large savings as online banks. They offer high yield accounts to valuedcustomers. In order to qualify, one must meet at least one of the following criteria: (a) open with a huge initial deposit (b)maintain a high balance and (c) make limited transactions.
Benefits of a High Yield Account
Advantages of a high yield account include:
High interest rates: The interest on a basic savings account could be as low as 0.20%. High yield accounts offer five-to-tentimes higher interest than basic savings accounts.
Automatic transactions: High yield accounts include facilities like direct deposit, ACH (automated clearinghouse) transactions and automatic deposits.
Pay bills online: Many online high yield accounts offer the free service of paying your bills online.
Easy access to money: A number of high yield accounts offer ATM access at several locations.
In 2009, US trucking company YRC Worldwide faced ruin as it struggled to restructure its debt. With tens of thousands of jobs at stake, the Teamsters union, led by James Hoffa, accused some YRC bondholders of sabotaging restructuring negotiations by purchasing credit default swaps (CDS) on their debt.
CEO and co-CIO of PIMCO. Served as President and CEO of the Harvard Management Company for 2 years, while also working at the IMF for 15 years. In 2008, his book "When Markets Collide", won the Financial Times award for Business Book of The Year in addition to being named as the one of the best business books of all time by The Independent.
Vice President and Director of the Global Economy and Development Program at the Brookings Institution. Former Turkish Minister of State for Economic Affairs. Head of the United Nations Development Program (UNDP) from 2005-2009.
Andrea Edwards has worked in marketing and communications all over the globe for 20 years, and is now focused on her passion – writing. A gifted communicator, strategist, writer and avid blogger, Andrea is Managing Director of SAJE, a digital communications agency, and The Writers Shop – a regional collaboration between the best business writers in Asia Pacific
James W. Harpel Professor of Capital Formation and Growth at the John F. Kennedy School of Government in Harvard University. Director of Program in International Finance and Macroeconomics at the National Bureau of Economic Research.