"We reviewed Synchrony Bank's high yield savings account, which has one of the best high-interest savings accounts with a high flying .60% APR. In today's low-interest environment it is possible for Millennials and Gen Z to get some interest on their deposit."
By: Allan R Kirby
Editorial Note: Mysmallbank.com does not earn a commission and will not accept compensation for the products or services mentioned in the article, this review is of our own opinion.
Saving in a low-interest environment
We all know how important it is to gain control of your finances by building a budget in order to; reduce spending, cut debt, save money, and build wealth. However, it can be difficult to build on your savings account when the national average for interest rates on a savings account is just .05% APY. That's right, it's basically nothing. Now if you have a fee-based account or one with high minimum balance requirements, your money is literally doing nothing and will lose value over time.
So what can be done to help you make just a little bit of money? Especially for savings accounts that are used for emergencies, or if you're currently saving extra money for other things such as a down payment for a house, a new car, or even a trip? My suggestion is Synchronys' high-yield savings account.
What is bad about savings accounts? A savings account is not desirable if you receive little or no interest, have minimum balance requirements and pay monthly fees. You are better to served to have a high interest, no minimum balance and no fee savings account.
Is it time to open a Synchrony high-yield savings account?
I am always on the lookout for banks that provide above-average interest rates on deposits for their customers. In our current near-zero interest environment there is a lot of demand for customers to find the best deals. This is why we are highlighting the Synchrony high yield savings account.
Synchrony Bank is an online-only fully insured bank that provides customers of their savings account a .60% annual interest rate while the national average is only .05%. Yes, that's right you will actually make some money on your deposits with Synchrony, in fact, the interest rate is 1100% higher rate than the national average, that is not a typo. Yes, it's a big percentage however in the end it's actually not a tremendous amount of money. But at the same time, the Synchrony high-interest account will move the needle while the national average of .05% will do nothing.
Let's look at the Synchrony High-Yield Savings Account:
The account has a number of benefits which includes;
No monthly maintenance fees
No minimum balances.
Access to ATMs.
Mobile app
A high 0.60% APY on savings.
Deposting money into Synchrony's High-Yield Savings Account:
Now if your not sure how to get money into the account, Synchrony provides a number of options;
You can deposit money to your High Yield Savings or Money Market Account in several ways:
Transfer from a Synchrony Bank account.
Electronic transfer (ACH) from a non-Synchrony Bank account that you’ve linked to your account.
Mobile check deposit via the Synchrony Bank mobile app. Sign in to the app, tap the Deposit tab, select your account, and take a picture of the check on your mobile device or tablet. The amount of a mobile check that you can deposit is currently limited to $10,000 USD per account.
Direct deposit from a third party.
Wire transfer to your Synchrony Bank account (must be initiated by the sending bank).
Personal or cashier’s check. Fill out a deposit slip (which you’ll get in your Welcome Kit from us) and mail the check and deposit slip to:
Any issues with the High Yield savings account?
Overall there is really no serious issues, however the following are two possible issues. However after years of dealing with online only banks, I have never had any problems and see this as a minor inconvienince.
No way to deposit cash into the account.
No large branch network.
Our review of Synchronys' high yield savings account
We at Mysmallbank.com embrace frugal living and we are always to find ways to help younger generations find ways to save money or to make a little more money than they do have. The Synchronys' high yeild savings account is a great way to make a little money on your savings, it's not much but compared to most banks it's a lot better than nothing. Visit their website and see if this is the right savings account for you!
We love the this high yield savings account!
Let's be realistic about the Interest you will earn with an Sychrony high yield savings account
If you deposit a $1,000 at .60% annual interest rate (*APR) year and leave the money in the account for the full year, the interest you would yield is $6 by the end of the year. I fully understand this is not much but at least you get a better idea of what you will receive. Plus with no fees, you are guaranteed to have that $6. Unlike many banks where you could have less than $1,000 if they charge fees and give you interest of only .05%.
What is APY? It stands for annual percentage yield. Banks are basically required to display the rate customers will receive from their deposit kept in savings accounts. The APY gives you an accurate idea of what your money could earn in a year.
Some additional questions about Synchrony
Is synchrony a safe bank?
Yes, Synchrony is a safe bank, it's a federally insured highly regulated bank. Your money is safe when it's deposited into Synchrony bank. Synchrony's deposits are insured by Federal Deposit Insurance Corporation (FDIC). The FDIC protects your deposits up to $250,000 per depositor. Meaning that even if Synchrony goes bankrupt your money is protected up to $250,000.
Learn more about banking, we answer some of your questions if your thinking of making a change and moving to an online only bank:
Do banks care if you close your account?
Banks do not want to lose customers so they may attempt to discuss a way to keep you from closing your account. However as the customer you have every right to close your account and switch banks if you so desire.
Generally speaking banks fully understand that they will gain and lose customers on a regular basis; But at the same time they may want to understand more about why customers leave. This is why banks try to collect as much data as possible all account closures over a period of time. They can take this data, analysize and then try and to learn more about how they can improve their products and services. So ultimately banks do care if you close your bank account because they will want to learn more about how to improve their customer relations.
Are online-only banks federally insured?
Yes, Many people assume online only banks are not regulated or have to follow less stringent rules. This is not the case, online banks, such as synchrony Bank are still highly regulated and require to be insured. Online banks just like traditional brick-and-mortar banks are also members of the Federal Deposit Insurance Corporation (FDIC). The FDIC protects your deposits up to $250,000 per depositor for each qualifying account.
What is the catch with high yield savings accounts?
It's true that some people are skeptical and think there is a catch opening a high yield savings accounts, but there is no risk to the consumer. Additionally, so long as the amount of savings is 250,000 or less, this is because Synchrony Bank is a member of the Federal Deposit Insurance Corporation (FDIC). The FDIC protects your deposits up to $250,000 per depositor for each qualifying account.
Should you close bank accounts you don't use?
Yes, you should close bank accounts you do not use. This is because at some point in time, based on a banks policy, any unused bank account will considered dormat and the account will be closed by the bank. If the bank is unable to contact the owner, the bank is required to transfer any money held in dormant accounts to the state's treasury. Additionally when a dormat account is closed there maybe fees applied to any money that is being held in the account. Additionally if you have an account that has monthly or yearly service fees, you will be paying those fees until the bank account is close.
Frugal Living is a segment of the MySmallBank.com blog written by Allan R Kirby, who writes and produces Personal Finance articles and videos.
Please note: mysmallbank.com nor the author received any compensation for any products or services featured in this article.