Is a High-Yield Savings Account Really Worth It?

You finally started saving money. Then someone asked you the question you weren't expecting, is it in a high yield savings account?And suddenly you're wondering if you've been doing it wrong all along. So today let's answer whether switching banks is really worth it. And this question has become much more common over the last couple years.And honestly, the answer depends on understanding one simple principle. I'm going to share that with you on today's show. So let's make sure your savings are working just as hard as you are.Hello and welcome to Financially Confident Christian. My name is Ralph Estep Jr. and I call myself the Financial Evangelist because I try to marry two worlds together, and that's faith and finance.And today I want to talk about something that sounds complicated, but it's really not that complicated. We got a great listener question. Listener asked, should I move my savings?They asked, what is a high yield savings account and is the extra interest worth it? And here's the thing I'm going to tell you right now.All of us work so hard for every dollar, so it's natural to want to see them growing instead of sitting still. And that's what I'm going to answer on today's show. But right now, maybe you've got a question. Maybe you're thinking about Ralph.I've got to make a difficult decision. I would love to help you with that decision. You can send your question by going to financiallyconfidentchristian.com/questionWe'll put a link in the show notes, but again, that's financiallyconfidentchristian.com/question Now, I want to read the subject line today because when I saw this in my email, I said, oh, this is one I got to cover. And this is what it said.It says, am I losing money by keeping my savings at a local bank? And that piqued my interest. Well, let's get right into the question. Listener writes this. Hi, Ralph.I've always banked at the same place my parents used. My savings account has been there for years and honestly, I never thought much about it.Recently, one of my co workers mentioned they're earning over 4% on their savings while mine is barely earning anything. Now I'm wondering if I've been missing out. Moving my money feels like a hassle and I don't want to make things more complicated than they need to be.Ralph, is a high yield savings account really worth opening or is it just another financial trend everyone is talking about? I'd love your thoughts. Thank you. All right. Well, you asked for it. And you are going to get my thoughts today.Where you keep your savings does matter more than many people realize. Because the thing we have to accept at the beginning, the truth about savings.Savings should be safe, it should be accessible, and it should be growing. Well, let's talk today about how to make that happen. So let's start by understanding what it actually is.A high yield savings account is still a savings account. Your money is still what we call liquid. It's still available. The big difference is the interest rate. And the interest rate can be a big difference.Many online banks pay significantly more than traditional savings accounts. What you said is that, Ralph, my, the bank that I've spent all my life with is the bank my parents used. And that's a very common situation.But there are a lot more options out there. Internet banking has made this a lot more easy to get to.And here's the thing you gotta understand, if the interest rate is higher, that interest compounds over time, your savings deserves to earn more than pennies. So this is a really important discussion today. But you got to remember the purpose of savings. Now we're going to differentiate two things.Emergency savings are not investments. These aren't the things you're planning for retirement. Emergency savings, first job and main job is protection. Is it there if you need it?We talked a lot about this on yesterday's show. Do I save first or do I pay off debt first? The first job of emergency savings is to protect you. The second job of it is accessibility.It's got to be there when you need it. The growth of it is an added benefit.So here's the thing you got to understand from the beginning, don't chase those returns at the expense of safety. I'll talk about why that matters here in a moment. But the purpose of your emergency fund isn't to make you rich, it's to keep you secure.So we got to talk about that for a second. Because I used to work in the credit union industry, I, I understand the other side of this. You've got to make sure your money is protected.There are a whole lot of emails, online scams and all those sort of things going on there trying to get you to take your money and move it somewhere. So the first thing I'm going to tell you is make sure that the bank you're choosing is an FDIC insured bank.Now, I'm going to throw one more caveat into this or a ncua, which is the National Credit Union Administration Insured bank. What that means basically is the government is saying These banks, these credit unions are safe when that.And what that means to you is that deposits remain protected within insurance limits. There's a certain limit. I'm not going to get into that today. It's a big number.It's not what we're talking about today, but it's basically saying that no matter what happens, your deposits are safe. So the first thing you've got to do is research those institutions before opening an account. Like I said, there's a lot of scams out there.The FTC is putting these out all the time. So don't let the unfamiliarity with them create unnecessary fear.You can go out and do a deep dive on each of these banks, each of these credit unions to know, are they FDIC insured? Do they have a good track record? Go look for reviews on them. Because as a good steward, it includes doing due diligence.That wisdom that we have to work with says to us we've got to ask questions before moving money. Which leads me to this. Don't chase every rate change.We are living in an interest rate changing environment right now and interest rates are changing. And I see so many people chasing after that.I see people moving from this bank to this bank to this bank every single month chasing just tiny differences. I think you've got to find a trustworthy institution. I love the fact that you said your parents have been banking here forever.But here's the thing, that doesn't mean they're the most effective for you. That doesn't mean they're most effective for your savings. But on the other side of this, you got to keep your financial life simple.I'm going to say it on the show today, I'm going to say it many more times because it's so true. Consistency usually wins over constant switching. I talk on the show all the time about financial peace.A peaceful financial life is often a profitable one. But over and above all those things, and I hope I've answered your question today, I feel like I have.High interest rate, high yield savings accounts are great things. But the thing that really encouraged me most about this is you've been saving. So if you're listening today, you're watching me keep saving.That's a beautiful thing. The interest rate does matter.But what matters more than that is that habit, that decision every time you get paid or once a month, whatever that looks like for you, you're doing it because a higher rate is never going to replace consistent deposits. You know, I talk about it on this show. I use the word preach about it on the show all the time. Automate your savings and let time do the work.I know you didn't ask this question, but the biggest contributor to your savings isn't the interest rate. It's your consistency. But I want to get a little deeper because sometimes we think being a good steward only means working harder.But stewardship also means making wise decisions with what we've already been given. Now here's what faith doesn't promise us. It doesn't promise us that money will multiply without our effort. We can't pray big returns on our money.It doesn't promise us that every financial decision is going to be obvious to us. And unfortunately, it doesn't promise us that you'll never make mistakes. Because guess what? You're going to make mistakes.But here's what fate does promise us. We have a God that delights in faithful stewardship. He relishes in when he gives us things, he lets us use these things. And we steward him well.And when we're intentional with even small resources, friend, we're honoring the one who entrusted them to us. Stewardship in your financial life includes learning new things. That wisdom that you're gaining is going to grow over time.And those small improvements matter. Remember this faithfulness isn't measured by the account size. It's measured by obedience.So don't underestimate the power of small wise decisions repeated over many years. And you're already doing that. Your savings have a purpose. Give them a place where they can quietly grow.Make those small improvements today, because those can become huge blessings tomorrow. So here's your win for today. I want you to review your current savings account rate. A lot of people don't know what that is.Check the interest rate, go look at the bank and see what is it paying me and then compare it with reputable high yield savings accounts. Now, your particular bank might even offer these.It might be as simple as setting up another account at your bank and then decide which one makes sense. But if you don't hear anything else I say, maybe you've got a great rate already. Automate that monthly savings if you haven't already done it.The knowledge that you're building is going to lead to better stewardship. Well, let's get into our Bible verse today. It comes from the book of Luke, chapter 16, verse 10.It says if you are faithful in little things, you'll be faithful in large ones. And I just love this verse because I think God is just telling us something so important here.That act of stewardship starts small and it grows from there.Every dollar that you have matters and that faithfulness that you're growing towards, that financial peace you're looking for, it grows through everyday decisions. That consistency and let me tell you right now, God values consistency. How about we pray together?Heavenly Father, I want to thank you for every resource you've entrusted us to us. Lord, you are so good to us.Teach us to steward our savings wisely, Lord, and help us make thoughtful decisions instead of the emotional ones that we find our flesh in.Give us discernment as we plan for the future, Lord, and may every financial decision we make reflect our trust in you and our desire to honor you, Lord. Help us to remain faithful with little so you can trust us with even more. And we ask this in Jesus name. Amen. Friend.Today you learned a very valuable lesson where your saving sit matters. So keep your money safe, let it earn what it reasonably can and stay consistent with those deposits.Because trusting God while practicing wise stewardship is the goal. So here's my takeaways for today. Understand how those high yield savings account work.Make sure that you're prioritizing safety first, don't chase those rates, build that consistent saving habit and by all means practice faithful stewardship. What a great question today and if you've got a question for the show, I would love for you to tell me about it.You can leave me a voicemail message by going to financiallyconfidentchristian.com/voicemail we'll put that link in the show notes. You just click on the link and it's super easy. Just record your voice and I will hear it and I might even play it on the show.That's financiallyconfidentchristian.com/voicemail thank you so much for joining me today.As I always say, I want to encourage you today, especially today, stay financially savvy, get more knowledge, get more wisdom and be a good steward of what you have. May God bless you and you have a truly great day. Ra.