Many students in school do not consider a secure high-yield savings account, but being wise about your money is something that you should begin doing while you are in school, not after you have graduated.
Why is it a good idea? While you may think that school loans means that you should not start thinking about savings, you should realize that if you are taking out school loans, some school loans do not accrue interest while you are enrolled. This means that you could invest the amount of money you would pay towards a loan now, and instead gain some money.
You do not have to invest in anything risky. Using a high-yield savings account is one of the safest things you can do, and one of the simplest as well. A high-yield savings account can have an interest rate anywhere from 1.1 percent to 1.9 percent. This is much better than the average savings account. The best thing about these accounts is that you have access to the money without penalty, unlike other forms of investment, like a certificate of deposit.
Low minimum deposits. The minimums for these accounts do not have to be very high, either. While the amount varies, it can be as little as one hundred dollars. Not only is the beginning balance able to be low, but you can also easily add on to what you have put into the bank, meaning you can create an excellent investment easily and safely.
Are there risks? The only risk with these accounts is that the money may take a few days longer to withdraw. These accounts are generally run by banks that are run online, which means that you may not have as much quick access to your money as when you put it in the bank. The money may take around three days to given to you. This means that you must have an alternative form of emergency funds, as the money in these accounts will not be easily available. However, the money put into these accounts is still secure, similar to a certificate of deposit.