For those looking for low-risk ways to help their money grow, high-yield savings accounts can be an important factor in determining what bank to join. Making sure to find a savings account with a return rate that outpaces the current inflation rate (which, as of October 2023 is 3.7%) can be important in ensuring you maintain your buying power. It’s also important to know that most of the larger brick-and-mortar style banks with physical branches (think Chase, Bank of America, etc.) often offer far lower rates on savings accounts than online banks. The average rate on a savings account among traditional brick-and-mortar banks is only 0.22% whereas some online banking institutions offer over 5%.
Some banks also offer multiple savings account options and/or even side accounts within your existing savings account to help you set separate certain amounts. This can be beneficial for anyone who wants to ensure a certain amount of savings is being put away for something specific, perhaps for an upcoming purchase or even for a down payment on a house. Plus, since FDIC insurance only covers up to $250,000 per account, having multiple accounts can be a great way to spread out your savings and still ensure financial protection. With that in mind, some digital banks offer side or extension holdings (SoFi refers to them as Vaults) within your same account. These serve as a better way to organize and delineate your money (thereby ensuring you meet your savings goals) without needing multiple accounts.