As a first-time homebuyer, you may be racking your brains trying to figure out how to make more money quickly for a down payment to qualify for a mortgage loan. You need to have cash tucked away that’s hopefully building interest, yet it also needs to be accessible in case the right home comes along and you need to act fast.
Thanks to low interest rates for over a decade (that disappeared with the rise in inflation after the pandemic), it’s been easy to put savings accounts out of your mind. Who cares about a yield of .03%? But as interest rates have risen, so have better returns on some savings accounts. High-yield savings accounts (HYSAs) or high-interest savings accounts, are a type of deposit account that gives you a greater return than a traditional savings account.
HYSAs are available at banks, online banks, and state and federal credit unions. You’ll be able to transfer money with an ATM card or online, and you’ll earn quite a bit more in interest, as much as 5% or 10 times the national savings account rate. You may pay fees, have restrictions on when you can take money out of the account, and you may have to maintain a minimum balance to avoid a monthly service charge. Your annual percentage yield (APY) can be tied to the amount you put into the account.
HYSAs are federally insured, so you can’t lose money, and you’ll earn compound interest for rapid account growth.
Article courtesy of bhhs.com
