The results of a recent survey show that high-yield deposit accounts are the preferred savings option for Americans making over $150,000, especially for a tax refund.
As per a recent Forbes Advisor poll, 65 percent of people in America with incomes above $15K have opened high-yield deposit accounts. With justification: This year, the interest yields on savings accounts with high rates of return have skyrocketed, with some of the accounts giving APYs above 4% and some even exceeding 5%. (APY refers to annual percentage yield; it represents the compounded growth of your money in a year)
41% of those who responded to the survey stated they did so to benefit from the higher interest levels, that have been spurred by a whole year of increases in the tax refund rate by the Fed Reserve. Although the Fed doesn’t control rates of interest on client financial products, when it increases the rate of tax refund, savings account interest rates usually follow suit.
According to Bankrate, a typical tax refund rate of interest on deposit accounts reached 0.25% for seven days ending April 5. However, you may be able to discover tax refund rates that are far higher if you’re willing to check rates across several banks, particularly if you’re considering a digital bank. Let’s dissect it.
What Does It Mean To Have A High-Yeild Deposit For Tax Refund?
A form of deposit account called an account with a high-interest rate offers higher rates of interest than conventional deposit accounts. It could be a wise decision to increase your fluid savings because:
- There are not many risks.
- You can access your money whenever you need to.
Online banks generally provide high-yield deposit accounts because they don’t have the costs of conventional banks. They offer their consumers lower interest rates in exchange for those savings. Additionally, they use increased prices to draw clients.
