- A high-yield savings account is a simple concept: You save money faster due to a higher rate.
- There are a few key considerations when choosing a high-yield savings account — such as the Annual Percentage Yield and fee structure.
If you’re a doctor, you know how hard it is to build savings early in your career. This is due to the fact that most doctors are carrying an outsized amount of debt from medical school, and then have years of low income as residents and fellows.
Many financial experts recommend having a three-to-five month emergency fund ready for those unexpected expenses. As a recent medical school graduate, this isn’t always possible.
When you start making money, building up an emergency fund should be one of your first priorities to protect yourself against financial shocks. But how do you get there as fast as possible? A high-yield savings account is a popular answer to that question.
What is a high-yield savings account?
A high-yield savings account is a savings account that offers a much higher interest rate than a typical savings account. The average interest rate on a regular savings account is .05% APY, but a high-yield savings account can allow you to save much more, much faster.
Benefits of a high-yield savings account
You save money faster
When your account earns a higher APY, your money grows faster. Simple as that.
For example, let’s say you have $10,000 in your savings account. If this money was in an average savings account, the yield could be as low as .05% Annual Percentage Yield (APY). At the end of the year, you would add just $5 to your savings from interest (based on daily compounding interest).
But the same amount of money in a high-yield savings account with a .60% APY would grow to $10,060 at the end of the year (based on daily compounding interest).
While an extra $60 might not seem like a lot of money right away, it makes a big difference in growing your savings over time. The interest continues to accumulate on the growing amount, and it can help you save for the future faster.
Your money is protected
A Panacea high-yield savings account is fully FDIC-insured. This means you’ll be protected up to $250,000.
A high-yield savings account doesn’t come with the volatility of the stock market, so you’ll never lose any of your principal in a bad day. Instead, you’ll have a fixed interest rate, and your money will always be making more money.
Your money grows passively
In a high-yield account, your money makes more money. It’s passive income that you don’t have to work for. Instead, your money works for you.
You can make up for lost time
When it comes to saving money, doctors are at a disadvantage. Early in your career, you’re likely taking on debt during medical school and not earning much during residency.
A high-yield savings account can help you make up for that lost savings time and set you up for the future.
Best options for a high-yield savings account
While many banks are competing for your business with a high-yield savings account, most are unwilling to offer a competitive interest rate in a fully digital manner — meaning without a personal interaction with a banker.
Newer, online banks have more flexibility and are able to offer you a great high-yield savings account. Here are a few of the top options on the market, as of Jan. 14, 2021:
Benefits of a Panacea Financial high-yield savings account
The interest rate on a Panacea Financial high-yield savings account is higher than most of the other big-name competitors. In fact, it’s 12x the national average — so your money makes more money faster.
You also get the full .60% interest, 24/7 customer support, your own personal banker and just a minimum requirement of $25 to open the account. You don’t need to have thousands (or hundred of thousands) of dollars to get these benefits.
And since Panacea Financial is all digital, you have access to your money and the ability to move it around anytime.
Check out Panacea Savings here.