Skyrocket Your Returns By Putting Your Money in High Yield Accounts

It’s a sacrilege to have your hard earned money just sitting around in a regular checking or savings account that hardly yields any returns. If you have your money in one of the big banks such as Bank of America, Chase or Citibank, you are probably only earning about 0.01% APY on your money. The national average for a typical checking account is only about 0.17% which is significantly less than the current inflation rate which is estimated to be about 1.9%. If you have your money in one of these low yielding accounts you are actually losing money considering inflation. What it essentially means is that if you have $100 in your account today, it’s only worth $98.10 the next year adjusted for inflation.

It does not have to be that way. You can put your money in other high yield accounts to get better returns. The first things that comes to mind when people talk about high yield accounts is CD’s. But, CD’s have a minimum lock in period and there is a penalty to take the money out before the lock in period ends. It’s a common misconception that CD’s are the only safe way to earn high returns if you do not want to invest in stocks or bonds.

There are several banks which offer high yield savings accounts and rewards checking accounts which yield high returns and have the benefit of not being locked into a contract unlike the CD’s. This gives you the freedom of being able to withdraw your money any time your feel like while yielding high returns.

I have a premium rewards checking account with a Credit Union and I earned $450 on my savings of $15,000 in 2018 which amounts to a 3% APY well above inflation. You can also earn such high yields by opening high yield accounts.

Below is a list of some high yield savings and checking accounts that I have come across based on  my research.

High Yield Savings Accounts

• Sallie Mae High-Yield Savings (2.10% APY)
• Marcus High-Yield Savings (2.25% APY)
• Citizens Access online Savings (2.25% APY)
• Synchrony High Yield Savings (2.20% APY)
• Ally Bank Savings (2.00% APY)
• Incredible Bank High Yield Savings (2.20% APY, $25k+)
• American Express Personal Savings (2.10% APY)
• FNBO Direct Online Savings (2.15% APY)
• Barclays Online Savings (2.20% APY)
• HSBC Online Savings (2.22% APY)

High-Yield Rewards Checking Accounts

• Consumers Credit Union Rewards Checking (3.09% – 5.09% APY)
• Baxter Credit Union Power-Plus Checking (3.00% APY)
• Axos Banks Rewards Checking (1.25% APY)
• Redneck Bank Rewards Checking (2.75% APY)

Typically with rewards checking account there are certain requirements to quality for the higher APY. Typical requirements are to have a direct deposit setup in the account and to have a minimum number of transactions every month to quality for the high APY. Through personal experience I have noticed that most of the times I don’t meet the requirement for the minimum number of transactions. So, in order to ensure I meet the requirement for minimum number of transactions, I review my account around the last week of every month to see if I have enough transactions to meet the threshold to qualify for the high yield APY. This will give you an idea of how many transaction you need to do to meet the threshold. One trick that has worked for me to achieve the required minimum transaction threshold is to split your purchases in a store into multiple transactions. Although not ideal, this would help you meet your transaction threshold easily.

Conclusion

Don’t let your hard earned money sit idly in a low yield account. Take charge and open one of the high yield accounts listed above and put your money to work. These small but consistent changes are what will help you achieve your goal towards financial freedom.

Tricks To Minimize Expenses

If you have gotten to reading this post, I am assuming that you have already read the previous post and you have started tracking your financial metrics to understand where you stand with respect to your finances.

This post is meant to provide simple tricks on how to minimize non-essential expenses. Below is a list of some typical non-essential expenses based on my experience and tricks on how to reduce them.

Eating Outside

Based on my experience eating outside by far seems to account for the highest monthly expense. Everyone is constantly looking for ideas to minimize expenses on eating outside. Eating outside at work seems to be one of the most common reasons for increased expenses associated with eating outside. In order to reduce eating outside you can simply start by bringing lunch from home just a few days a week. You can bring a simple lunch such as a salad, a cold sandwich or ready to eat meals from the grocery store that can be heated up at work. This has a two fold advantage, not only does it help save money but it also makes you healthy.

Other ways to minimize expenses on eating outside is by limiting the number of times you go out to eat as a family to once per week or going out to eat only during special occasions.

Online Shopping

The other major source of unnecessary expense is online shopping. Online binge shopping has become a favorite hobby for a lot of people. People tend to buy unnecessary things online due to the great return policy with the hopes that they would return it later if they did not need that item. But, guess what, very few  people ever get to returning those unwanted items adding to unnecessary clutter and wasted money.

One way you can minimize your online spending is by curbing your urge for impulse purchases. There are several ways to minimize impulse purchases

• When you like something, don’t immediately buy it. Instead add it to your cart or click on watch/save for later. Come back a day or two later and if you still think that it is something you really need then go ahead and buy it.
• Don’t buy multiple items with the hope of keeping one and returning the others. That seldom works. Just buy one item at a time and make it a habit to not buy the next item until you have returned the first item.
• People tend to buy gift cards and add money to their online accounts so it’s easy for them to purchase items.  Always pay with your credit card or bank account each time you make a purchase. This gives you an opportunity to re-think the purchase and decide if this is a purchase you really want to make.

Cable & Internet

Cable and internet bill seems to account for another major chunk of monthly expense. Internet speeds seem to be constantly increasing and people tend to always want the highest speed internet. You obviously have to pay a premium if you want a ultra high internet speed. However, if you are a typical household and all you use your internet is for streaming videos, music and surfing the internet, an internet speed of 40 – 50 Mbps is more than sufficient. By reducing your internet speed you should be able to reduce your monthly internet bill.

Another major expense is your cable bill. People rarely watch cable these days. However people tend to pay for cable because it tends to come bundled with your internet. If you are one of those people who barely watches cable consider cutting your cable and switching to a internet only plan. This should significantly bring your monthly bill down. Instead, switch to online stream services such as Netflix, Hulu, Amazon prime etc. if you like to watch local channels, you can always buy an HD antenna and you will be able to get all your local channel and news for free.

By applying the simple tricks provided above one should be able to reduce their unnecessary monthly expense.

This is by no means an all inclusive list. Please add any tricks that have worked for you in order to reduce unnecessary expenses in the comments.