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High Yield vs Regular Savings Accounts: Understanding the Basics

May 14, 2024

Saving money is essential to financial planning, providing a safety net for emergencies, and enabling individuals to achieve their long-term goals. One of the fundamental choices to make when it comes to saving is deciding between high yield vs regular savings accounts. Both options have their unique characteristics, benefits, and drawbacks. In this blog, we will explore the key differences between these two types of savings accounts, including interest rates, account features, accessibility, and potential drawbacks.

Interest Rates

Interest rates are among the most significant differentiating factors between high yield and regular savings accounts. High yield savings accounts, as the name suggests, offer higher interest rates than regular savings accounts. These higher rates are typically above the national average, making them an attractive option for individuals looking to maximize the growth of their savings.

Regular savings accounts, on the other hand, usually come with lower interest rates. These rates may fluctuate but often hover around or slightly above the national interest rate average.

Account Features

Both high yield and regular savings accounts offer essential features such as online banking, electronic transfers, and account management. However, high yield savings accounts may come with additional perks. This might include no or low minimum balance requirements, no monthly maintenance fees, and higher withdrawal limits. 

On the other hand, regular savings accounts may have minimum balance requirements and charge monthly maintenance fees if the account balance falls below a certain threshold. While they might lack some of the bells and whistles of high yield accounts, regular savings accounts are known for their simplicity and ease of use, making them ideal for those seeking straightforward saving options.

The Benefits of a Benchmark FCU Enhanced Ultimate Checking Account

A great example of a value-added high yield account is Benchmark FCU’s New Enhanced Ultimate Checking Account. This account package enables members to earn 5.00% APY* on checking account balances up to $50,000. It has no monthly maintenance fee, no minimum deposit to open, and no minimum balance to earn rewards. 


Accessibility is another aspect to consider when comparing high yield and regular savings accounts. Standard savings accounts typically offer more flexibility when it comes to accessing funds. Customers can withdraw their money without significant limitations or penalties, making it convenient for immediate financial needs.

High yield savings accounts might come with more restrictions. These accounts may have limited withdrawal options, and exceeding the allowed number of transactions within a statement cycle could incur fees. Consequently, high yield accounts are best suited for individuals who can commit to long-term saving goals and are less likely to require frequent access to their funds. It’s best to check with your financial provider to see if any restrictions apply to a specific high yield account. 

Potential Drawbacks

While high yield savings accounts offer attractive interest rates and potential earnings, they are not without drawbacks. Firstly, the higher interest rates are subject to change based on market conditions, and there is no guarantee that they will remain consistently high over time.

Consequently, the interest earned on high yield accounts may not always outpace inflation. Additionally, high yield savings accounts may have more stringent requirements, such as higher minimum deposit thresholds, to open an account. This could make them less accessible to individuals with limited funds or those just starting their savings journey. When searching for a high yield account, look for an account like Benchmark’s Enhanced Ultimate Checking Account with no minimum deposit to open. 

On the contrary, while safer in terms of interest rate stability, regular savings accounts might provide little returns. The lower interest rates could result in slower wealth accumulation, making it challenging to reach long-term financial goals quickly.

High Yield vs Regular Savings Accounts: Which is Right for You?

Understanding the differences between high yield and regular savings accounts is crucial for making informed decisions about one’s financial future. High yield savings accounts offer the potential for higher interest earnings and may come with attractive features, but they require a level of commitment and are best suited for those with long-term saving goals. Regular savings accounts, while more straightforward and accessible, may offer lower interest rates and limit savings’ growth potential.

Ultimately, the choice between these savings accounts depends on individual financial goals and capabilities. Regardless of the chosen account type, saving money remains essential for building a secure and prosperous future. By understanding the basics of high yield and regular savings accounts, individuals can take the first step towards making prudent financial decisions and achieving their economic aspirations.



*APY = Annual Percentage Yield. APYs current as of 5/1/2024. This is a variable rate account, so the yield is subject to change at the Credit Union’s discretion without prior notice. Account package consists of Ultimate Saver and Ultimate Checking Accounts.  If monthly account qualifications are met, earn 5.00% APY up to $50,000 on Ultimate Checking balances with balances greater than $50,000 earning a yield of 3.00% APY. If monthly account qualifications are met, balances in the Ultimate Saver will earn 0.25% APY.  If monthly qualifications are NOT met, Ultimate Checking and Ultimate Saver balances will earn a yield of 0.05% APY. Domestic ATM fees incurred during qualification cycle will be reimbursed up to $10 if monthly qualifications are met. Transfers between accounts do not count as qualifying transactions. Limit one Ultimate Account Package per SSN. 

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