Want faster savings growth? Try a high-yield account

(InvestigateTV) — A high-yield savings account pays a much higher interest rate than a regular savings account, allowing money to grow faster for those saving toward long-term goals.

Kionnie Epps, the founder of the YouTube channel The Responsible Homegirl, said the accounts work well for purchases that require extended saving periods, like a house, car or vacation.

“Let’s talk about buying a house or buying a car or just anything – a big vacation, anything that’s going to take you a little longer to save – put it in a high yield savings account. You’re going to get a higher interest rate and that money is out of sight, out of mind,” Epps said. “You won’t be able to go in the store and do a quick little transfer, because it’s going to take you about 2 to 3 days to actually get that money into your checking account.”

Epps said the transfer delay creates boundaries for spending while allowing savings to accumulate faster.

“Most high-yield savings accounts are online banks, and they are able to offer you that high interest rate because they don’t have all of the overhead that a traditional bank will have,” Epps said.

Consumers can research high-yield savings accounts online and should verify they are FDIC insured. This guarantees protection for up to $250,000 per depositor in case of bank failure.

Epps recommends having a traditional savings account and a high-yield one online, where there’s no debit card attached, to avoid the temptation of accessing the money on a whim.