Having a contingency high yield emergency fund is the best of both worlds.
You have the assurance of knowing what to do with saved money while earning through a high interest account rate when you have excess income.
The key is to ensure that any account you choose to use offers you quick access to your funds should you need them.
If you’ve ever wondered why do bank transfers take so long, you’re far from alone. It’s an important consideration when selecting any savings product!
Today we’ll take a look at high yield savings options and the pros and cons to bear in mind.
Why Have An Emergency Banking Fund?
It is a huge advantage to have an emergency savings bank account set aside for when you have an unexpected bill.
For example:
- Major vehicle repairs.
- An urgent medical treatment.
- Unemployment.
- Repairs to home appliances.
As a financial buffer, a separate bank account with savings and accumulated interest can be reassuring in times of need. It will help you avoid compounding the issue through the use of short-term, high-interest debt.
If you earn more than you need to spend on your essential expenses, it’s well worth socking away a little spare cash each month and creating a cushion you can fall back on in a crisis.
The Benefits Of Havings An Emergency Savings Bank Account
Not convinced? Opening a high yield savings account can do a lot more than provide you with confidence that you’re prepared to tackle any emergencies.
If you have any significant expenses planned (or a bucket list!), you can use that same high yield account to make your cash work harder and bring you closer to those aspirations.
Monthly savings goals are a great way to curb impulsive spending and get you into the habit of celebrating each deposit you make to your savings account.
All told, an emergency account is a protection against life’s unexpected twists, but it also means you might generate some great returns while you live it.
How Do High Yield Emergency Savings Accounts Work?
High yield means that your savings account with Cashero generates better interest rates than you’ll get through a conventional bank.
You’ll receive a whopping twenty to twenty-five times more interest, so it’s a seriously significant advantage!
But there’s often a toss-up between liquidity and returns.
In essence, that means the easier it is to access your savings, the less you earn – though not always.
With your Cashero account you have the ability to withdraw or transfer cash anytime you need, while still retaining the high interest returns!
How Much Interest Can I Earn On My Savings?
Let’s have a look at this example account to quantify the returns you can expect:
- A deposit of $5,000 over five years will earn a 5% APY (annual percentage yield).
- Over the term, you’ll earn $1,250, so a total balance of $6,250.
- Interest payments are daily, so you can withdraw cash, plus the accumulated interest, whenever you like.
Curious as to why Cashero can offer such impressive returns, a world away from the interest rates offered on savings with a conventional bank?
Part of the reason is that digital finance is much more efficient.
Digital accounts offer all the functions you get through a conventional bank (money transfers and currency exchanges) but without the overhead required to provide for bricks and mortar branches.
When you add to that intelligent portfolio management, instead of generally low-rate returns, you get an industry-beating high yield interest rate for each day you allow your savings to grow.
It’s a great solution if you want a reserve fund in case of an emergency. And don’t forget, your hard-earned money will gain interest as time passes!
Content Disclaimer:
As of the date of publication, the information contained on this page is deemed to be factually accurate for all terms of conditions, features, and fees. Changes made to Cashero’s terms of conditions, features, or fees after the publication of this content may not be accounted for.
App Disclaimer:
The Cashero App is now available for download in both the Apple App Store and Google Play Store, though not all features are currently functional. Cashero has not yet officially launched.
