3 effective ways for college-bound teens to maximize their HYSA

It’s really exciting to graduate high school and know that college is in your future. Your world is full of possibilities. Although you may not yet be financially independent from your family, college is a great time to break away from your family and begin to become a full-fledged adult. Smart adults know that a high-yield savings account (also known as a HYSA) is one of their best financial assets. This is because you can store your cash safely and earn interest.

According to the FDIC, the current average interest rate for all savings accounts is just 0.47%. But some HYSAs will pay you 10 times more for your money! Here are some ways you can maximize your HYSA this year and into the future.

1. Set money goals

Call me weird (you won’t be the first person to do that). But I enjoy putting money into a savings account. Because it gives me the opportunity to dream about what I would do. My Account helps satisfy this urge, too, by giving you the ability to set up multiple sub-savings accounts (which may be called “buckets,” “pockets,” etc., depending on your bank). This means that no matter what I save for, I get the same high Annual Percentage Yield (APY) on all my saved cash.

If you want to maximize your HYSA, we recommend finding an account that can do the same. Having separate parts of your savings account for different goals makes it easier to track your progress toward those goals. And setting these goals can be a powerful impetus for saving more money. There’s nothing better than watching your balance grow.

2. Designate some for emergencies.

Yes, I know I said above that if you want to save effectively, it’s very important to have a goal and plan for your savings. Well, there is one particular goal that is important enough to deserve its own spot on this list: an emergency fund. As a college student, you may think emergency savings are less important. Because you are not yet completely at the mercy of the world. In fact, in times of crisis, you are likely to have parents or other relatives whom you can turn to for unexpected help. Bill.

However, the sooner you get into the habit of maintaining an emergency fund, the better off you will be in the future, ideally when it comes to being self-sufficient from a financial perspective. Living paycheck to paycheck is smelly and expensive.

If you don’t have the funds to cover unplanned expenses (such as car repairs or trips to urgent care that aren’t fully covered by insurance), you may have no option but to take on high-interest debt. What’s worse than a $1,000 bill from an auto mechanic? When you have to charge your credit card, you know you’ll have to pay 20% (or more) interest.

3. Create automatically

A high-yield savings account won’t help you much if you don’t put money into it. That’s why it’s great to be able to automate your savings contributions. Set a monthly savings goal (or as often as you want, perhaps when you get paid from your on-campus job?) and set up automatic transfers from your checking account to your savings account.

It’s easier and faster if both accounts are at the same bank, but even if not, it’s still worth doing. This way, you can always save some of your money without having to actively save it. If you take these simple steps, you’ll be rewarded with higher savings account balances (and more interest earnings).

Another good option, if available, is to enroll in your bank’s automatic “rounding” or “keep change” program. If you choose, the amount you spend from your checking account will be rounded up to the nearest dollar and the difference will be credited to your savings. For example, if you put an $18.22 pizza bill on your debit card, $19 will be debited and $0.78 will be credited to your savings account. This is a great way to ensure that you always have a small amount of money flowing into your savings.

If you’re heading off to college in the fall, you probably have a million thoughts on your mind. Who will be your roommate? (Will I help keep my room clean?) What classes do you take? Maximizing your high-yield savings accounts is probably at the bottom of your list. But if you can keep these moves in mind and put some of them into practice, you can start your adult life off on the right financial footing. And trust me when I say it’s worth it.

This savings account is FDIC insured and can earn 11 times the bank’s earnings.

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