1. Interest Rate

How much interest does the account currently pay? Is it a standard rate or an introductory promotional rate? Savings account rates are generally flexible and can be changed at any time. But some accounts will specify that the currently advertised rate is only available for an initial period of time. Another factor to look for is whether there are minimum or maximum balance thresholds for earning the promoted rate.

2. Required Initial Deposit

How much money is required to open the account and are you comfortable depositing that much at the outset?

3. Minimum Balance Required

How much money are you required to keep in the account going forward? You’ll want to feel comfortable with always meeting the minimum threshold because falling below it can incur fees or invalidate the interest rate you’re expecting.

4. Fees

Does the bank or credit union charge any fees on this account? If so, what are the ways you can avoid it (e.g., always keeping your balance above the minimum threshold)? Also, if you exceed the federally mandated limit of six withdrawals per month, what is the bank’s fee for the violation?

5. Links to Other Banks and/or Brokerage Accounts

Will the bank allow you to create links between your high-yield savings account and deposit accounts you hold at other banks or brokerages? Are there restrictions on linking multiple accounts or a waiting period for new accounts during which you cannot change your initial linked account?

6. Accessing Your Money

What additional options, if any, are available for withdrawing funds? Can you withdraw funds from savings using an ATM card?

7. Deposit Options

If you expect you’ll want to deposit checks into the account, does the bank have a smartphone app that offers mobile check deposits? Otherwise, will you be able to mail in checks or deposit them by ATM?

8. Compounding Method

Banks can stipulate that interest will be compounded daily, monthly, quarterly, semiannually, or annually. While more frequent compounding will theoretically increase your take-home yield, if you stick to comparing accounts by APY instead of annual interest rate, the compounding factor will already have been taken into account.

How to Open a High-Yield Savings Account

If you’re lucky enough to have competitive high-yield savings account available at your current bank, opening a new account will be a breeze. It will likely be possible through your online banking portal with little need to enter personal information since you will already be verified with the institution.

If you’re opening a savings account at an institution that is new to you, the process will be more involved, though none of it will prove overly complicated. Almost all high-yield savings accounts can be opened online, so you’ll want to set aside 15 minutes or so when you can fill in the electronic application on your computer. You’ll also want to have your driver’s license, Social Security Number, and primary bank account information at hand to facilitate the application process.

Where can a consumer find a high-yield savings account?

Online banks are offering the highest rates. Still, you may be able to open a high-yield savings account where you already bank.

What are the main things to look at in a high-yield account?

Read up on and compare factors such as initial deposit requirements, interest rates, minimum balance requirements, fees, links to other banks and/or brokerage accounts, access to your money, deposit options, and compounding method.

The Bottom Line 

A high-yield savings account can be a useful middle-ground for your money, offering protection of your principal, the safety of federal insurance, and a yield that’s higher than regular savings account though less than you could potentially earn from riskier investments. Just be sure to think through how one or more high-yield accounts can best serve your financial goals and situation. Then, do your homework to find an account that will maximize your earnings at the same time that lets you avoid fees without imposing restrictions that don’t fit your needs.