Blogging Finance Travel Tips

5 High Yield Savings Accounts in 2020 That You Can Use to Save For Travel

Everyone is traveling and living their best life, but how? My goal is to provide tools for you to implement so that you can live your best life as well. 

One thing that you can do is to have separate savings account for travel only. Online banks are great because they are not meant for everyday spending and normally do not offer debit cards, which helps you commit to your savings goal. Also, online savings accounts are very convenient and allow six withdrawals/debits per cycle. Most banks have interest rates of less than 0.5%. The current national average is bout 0.27%. It makes it hard for your savings to grow when the rates are low. This article highlights savings accounts that have a high yield, all above 1.00%.

Before we get started, here are a few key terms for your knowledge.

Interest
The amount of money that will be paid on an investment you make.

Simple Interest
Interest paid only on the original amount. Example: If you invest $1,000 at a 5% interest rate, at the end of the year, you earn $50. It is simple and straight forward.

Compound Interest
The addition of interest to the principal sum of the deposit, or loan. It is interest on top of interest. Instead of payouts, your money is reinvested.

APY
Annual percentage yield is the rate of return earned on savings deposits or investments, taking into account compounding interest. Compound interest is calculated periodically and immediately added to the balance.

Today, we are focusing on accounts that use compound interest and offer a higher APY.

Here are five reputable banks that offer high yield savings accounts with rates 4x the national average and above.

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Marcus by Goldman Sachs
APY 1.70%
Minimum Deposit- None
Monthly Maintenance Fees– None
Benefits
Ability to link other bank accounts for incoming and outgoing transfers
US-based contact center open seven days a week
FDIC insured
Only takes a few minutes to open
https://www.marcus.com/us/en

Capital One
APY 1.70%
Minimum Deposit– None
Monthly Maintenance Fees-None
Benefits
Top-rated mobile app
Digital savings tools
FDIC insured
Access your money 24/7
Easy online transfers
Savings goals on the go
Mobile check deposit
https://www.capitalone.com/bank/savings-accounts

Barclays
APY 1.70%
Minimum Deposit– None
Monthly Maintenance Fees– None
Benefits
Secure, 24/7 online access
Easy online transfers
Direct deposit made easy
Tools to help you save
https://www.banking.barclaysus.com/online-savings.html?

Ally Bank
APY 1.60%
Minimum Deposit– None
Monthly Maintenance Fees– None
Benefits
Interest compounded daily
FDIC insured
24/7 support
https://www.ally.com/bank/online-savings-account/

American Express
APY 1.70%
Minimum Deposit-None
Fees– None
Benefits
Links easily with current bank accounts
24/7 account access
FDIC insured
Link up to 3 accounts
https://www.americanexpress.com/personalsavings/home.html

There are many online savings account to consider. I could not list them all, but I listed banks that I personally use, and banks with the best benefits. The best thing to do is research which one works best for your lifestyle.

Which bank do you use to reach your savings goals?

Karisha Parks BSBA, MBA, MHRM

 

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