High Yield Savings Account

Don’t be confused by the name, a high yield savings account is just a high interest savings account. The name comes from the fact that when your savings earn a high rate of interest, your yield of interest returns will be higher too. With a high yield savings account you can build a savings balance to help you make a dream purchase like a new TV or an overseas trip, or to create an emergency fund to help you manage those months where there are more bills due, or to cover you in case you lose your job or are unable to work.

Features of a High Yield Savings Account

There are some basic features you can expect from all high yield, high interest savings accounts in Australia, as Australian banks have become very competitive in their savings account offers to encourage deposits, and a new, healthier saving mentality. A high yield savings account:

• Offers you high interest. The high interest earnings on a savings account are what allow you to reap a high yield from your savings. The return on your savings contributions is your yield, just as the return a farmer gets from working his land, is his the harvest of his crops. Therefore, when you put in the initial effort of making contributions to your savings account during the month, at the end of the month you will see the results of your hard work in your interest yield paid into your account and added to your contributions.
• Is free to open and use online. When a bank account can be opened online through an electronic application form and be managed online through internet banking systems and email correspondence, as a high yield savings account can be, the account requires less time and effort on behalf of the bank and when the banks can save money on their man power costs, they can pass those savings onto you, by not charging you monthly fees, opening or activation fees and not even transaction fees to make deposits or withdrawals.
• Is fun and easy to use online. Using internet banking to manage and view your account is easy as you can see at a glance how much you have in your account, and you can easily create individual savings sub-accounts for different savings goals. You can track your progress using graphs and other interactive tools and you can even quickly and easily shoot off an email to your bank if you have a question or need more information about your account.

How to Ensure the Highest Yield on Your Savings

Opening a high yield savings account will not in itself ensure you a high yield return on your savings. You have to make sure you are opening the right high yield account, and you have to be committed to your savings goals, no matter what they are. To get the highest yield from your savings:

• Determine your financial needs. You need to be clear of the type of yield you want from your savings with a high yield account, and when you want it by. With your savings goal clear in your mind, consider how much you can afford to budget for to contribute to that savings goal. Once you have determined your financial needs, you can choose the high yield savings account which best suits you. For example, do you need a fast short term result or are you starting a long term savings plan? Compare the interest rates and their conditions and expiry dates as you may find the highest yield account is the one with the most stable interest rate, rather than a promotional period.
• Change your bad habits to good. Opening a high yield savings account is your opportunity to reform your bad financial behaviour and start making smarter choices with your money. For example, if you used to spend everything you earned, pay yourself first by setting up an automatic transfer to your savings account every payday so you don’t notice the contributions being made. If you are an impulse shopper, reward yourself when you resist an impulse purchase by putting the amount of the would-be purchase into your savings account as saved funds.
• Regain, and remain in, control. As you transform your bad habits you regain control of your finances, instead of having your finances control you. However, as you become more aware of your spending and make conscious decisions to save, you need to remain in control of your spending and saving for the long term. This means you need to keep your savings goals and progress close to the front of your mind, monitoring your savings contributions and interest earnings through internet banking, this is why it is so important to choose a high yield savings account with intuitive and inclusive online banking features. Also make sure that part of your new regular financial rituals is a check and comparison of the other high yield savings accounts on offer, and the interest rates they are advertising, compared to the one you are earning, of course always read the fine print of those advertisements.

To start your comparisons of high yield savings accounts, or to make a regular check on the Australian accounts currently offering the highest yields, use the Savings Account Finder comparison tables here. You can follow our secure links from the comparison table to an online application to start sowing the seeds of your yield today.