High Yield Savings Accounts Are Worth It — Here’s Four Reasons to Have One

A high-yield savings account is a savings account with a higher interest rate for depositors. It operates exactly like a regular savings account, but gives users a higher return on their money.

It’s important to know that if you use a high yield savings account (HYSA), the interest rate can change on the account as the Federal Reserve adjusts the federal funds rate. So if your monthly interest rate fluctuates on a monthly basis, it likely won’t make a significant difference in your interest earnings. And with Current, you will currently earn up to 4.00% APY.*

But how does this translate to money in your pocket? For example, if you hold $2,500 in the Current Savings Pod (which is considered a HYSA) for a year, you could earn $100 in interest income — without any effort on your part.

But for any consumer, a HYSA is a no-brainer for three reasons. Here’s what you need to know.

High yield savings accounts produce passive income

Passive income is somewhat of a buzzword online, typically with people trying to get you to sign up for a course or product that makes hefty overpromises. But with a high-yield savings account, you can feel confident that you will earn guaranteed income for depositing your money.

With Current Savings Pods, you will earn a valuable 4.00% APY on your deposits, up to $6,000. Once you deposit your funds, there’s nothing more to do — just sit back and collect a monthly interest paycheck.

But what does 4% look like over the course of a year? Here’s a few examples:

These interest deposits are made into your account monthly and are yours to keep.

It helps you fight back against inflation

The last few years have been marred by rising prices for everyday goods, and continues to strain consumers wallets even further than even before the inflation spike.

There are several ways to fight back against inflation — which is really a fancy way to say ‘do more with what you currently have’.

First, you can go to your current employer and ask for a raise, or even potentially start searching for a new job that pays more. This could quickly shift your financial picture. On a smaller scale, opening a high yield savings account to earn more on your cash can create a new income stream while interest rates are elevated.

You can automate it to hit your savings goals

A large part of personal finance is the psychology behind it. The more you can automate it to work for you without any active work, the better your odds are of hitting your goals.

For example, if you’re struggling to put money away in a savings account, experiment with automatically having $100 a month moved from your checking account to your Current Savings Pod. If you don’t notice it missing, let this continue to happen.

By automatically saving, you’re creating arguably the most important save guard you can give yourself — an emergency fund. This will help you avoid using credit cards or other high-interest rate financial products that could send your financial picture spiraling if you can’t afford to pay it back immediately. And once you have at least three to six months worth of savings, you can begin working on other financial goals such as paying off credit card debt or beginning to save to buy a home.

Bottom line

As the Federal Reserve is battling against inflation, interest rates continue to remain high. There’s no telling when these efforts will slow down, so it’s a great strategy to use these high interest rates in your favor.

If you don’t have an established high yield savings account, consider the Current Savings Pods to start building your financial future.

* The Annual Percentage Yield ("APY") for Current Interest is variable and may change at any time. The disclosed APY is effective as of January 18, 2023. Qualifying direct deposit of more than $200 required for 4.00% APY. No minimum balance required. Must have $0.01 in Savings Pods to earn Current Interest on up to $2000 in deposits per Savings Pod up to $6000 total. Please refer to Current Interest Terms and Conditions.

Current is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Member FDIC.