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That you hide Retirement funds or simply looking for a new way of money storage , opening a high interest savings account can be an attractive option. According to its very definition, the single financial offer can allow you to develop your money faster than a traditional account over time without having to do additional work. But before deciding to move your funds in one, it may be useful to get the full image of what they can involve. Read the rest for the risks and benefits of moving on to a high interest savings account, according to financial experts.

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Should you go to a high interest savings account?

1. You may need to keep a high minimum amount to collect the advantages.

In addition to what they plan to contribute to it, most people open up an elevated interest savings account in the hope of watching it increase more quickly over time thanks to the special rate. However, you may want to check if you will need a considerable piece of change to see the advantages to start.

"During the transition to a high interest savings account, the maintenance of the balance required to receive the high interest rate can be difficult for some", " Annette Harris , founder of Harris Financial Coaching , recount Better life . "For example, the account may require that you maintain a balance of $ 25,000 to receive the high interest rate. If you drop below this balance, your interest rate will also be."

"In addition, going to the interest rate of the following level can be a challenge," she adds. "It may require a substantial deposit to receive one or two additional percentage points. For this reason, it is important to consider whether other savings or investment options would be more beneficial."

2. It could be one of the safest investments you can make with your money.

Any financial decision is accompanied by potential risks and awards, which makes it difficult to assess what suits you best. But experts say that high interest savings accounts provide one of the safest ways to park money.

"Passing your emergency savings in a higher online savings account is the only free lunch in finance," said Greg McBride ,, Chief financial analyst on Bankrate.com. "You get an additional return and you don't have to take any risks to get it."

In many cases, you can see many of the same advantages of a traditional savings account - only better. "Your money is protected by federal insurance insurance [FDIC], the account can be linked to your current bank for easy transfers in both directions, and the best yields are in the district of 4.5 to 5% , compared to the average savings account which pays 0.23%, "explains McBride.

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3. You could be billed to withdraw money too often.

Ideally, all money in your savings account will only be accessible if it is an emergency situation or you pay an ultimate goal as retirement. But depending on the terms of your arrangement, withdrawing it from a high interest account can be accompanied by expensive penalties. AE0FCC31AE342FD3A1346EBB1F342FCB

"Check all the withdrawal conditions attached to the account," explains Alex King , certified public accountant and founder of Generation of money . "You will often be penalized to frequently withdraw money from high -efficiency savings accounts, potentially even lose interests won."

4. You may not be able to quickly access your money.

For many, savings accounts can be a useful resource when a sudden emergency or a necessary unexpected expenditure required for more money than your budget cannot manage. Unfortunately, some experts warn that high interest holders may not always be able to get their money as quickly as they need.

"It can sometimes take a little more time to access your money," said Robert Farrington , founder and CEO of The college investor . "And as many of these banks are online, you will have to transfer your funds to another bank to access it as a currency lasts in some cases."

However, this still does not necessarily do the worst investment option. "Despite potential sanctions on your withdrawals, it is always relatively easy to access your money in relation to investments related to goods or other non -liquid assets," said King.

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5. It may not be the most lucrative place to store your money.

Whatever your financial situation, high interest savings accounts offer a relatively without risk of making money on the money you have at hand. But if you are able to think in the long term, there is a chance that you can make the most of your money by being strategic with at least some of the funds.

"You can get a higher return on your money by investing instead, although it has a greater risk," said King. "With the increase in prices, however, the return on high interest savings accounts becomes more competitive in relation to stock market yields."

Best Life offers the most up -to -date financial information for high -level experts and latest news and research, but our content is not supposed to replace professional advice. Regarding the money you spend, save or invest, always consult your financial advisor directly.