None of need to be told that savings account rates are in the crapper lately. Most passbook savings accounts pay out a paltry 0.5% interest yield or less. But you can open a high yield savings account which will earn considerably better interest if you either:

• Have a large sum of money to deposit all at once.
• Are willing to accept restrictions regarding how often or how much you can withdraw from the savings account.
• Are willing to maintain a minimum balance at all times.

While these restrictions make it difficult for many to open a high yield savings account, they are in fact ideal for gift savings accounts. After all, the reason you open up savings account for a son, daughter, niece, nephew, or grandchild is so that money can be saved for them so that they’ll have it when they really need it: when they’re starting college or a career.

Think about it. You can still buy the kids some toys, but don’t go overboard spending money on toys when you could put money aside for them that will be appreciated much longer. After all, unless the kids are truly exceptional, they’ll only end up playing with the toys’ boxes anyway. And if they are truly exceptional, you’ll really want to make sure you put money away for them because they’re going to need it at that Ivy League college.

After you’ve started the kids’ high yield savings accounts, consider making periodic deposits for them on birthdays, Christmas, and other special occasions. When they’re 18 and ready to begin life on their own, they’ll be glad you had so much foresight.

High yield savings accounts range widely in the rates they offer, so it pays to get on your computer and do a little research before plopping down the first deposit. Most high yield savings accounts pay significantly more than passbook savings accounts, but that isn’t true across the board, so invest the time to make sure you are getting the best possible rate of return based on the amount of money you are depositing.

It always amazes us how many people have managed to amass fairly large sums of money and still don’t have enough sense to put it into a high yield savings account. Let’s face it, if you’ve gone to all the work of earning your money, and you didn’t turn around and spend it having fun, you should at least put your money to work for you earning a reasonable interest rate.

Don’t get us wrong, it’s your money. Do whatever you want to with it. But in our opinion, keeping any more than $1,000 in a passbook savings account instead of putting it into a high yield savings account makes about as much sense as one of these other options:

1. Keep it in the drawer. On the plus side, you’ll always be able to find it. On the negative side, so will the average burglar or teenager (and if you have teenagers, you know the difference is negligible).
2. Carry it in your wallet. This gives you the benefit of always having your money with you, so you can be sure that it’s safe. Unfortunately, it makes it awfully hard not to spend it all whenever you see something you want. And even if you can keep those urges under control, wallets full of money tend to attract muggers, used car salesmen and others who have impure motives for your cash.
3. Put it in a passbook savings account. Why would you put your money someplace where it’s only going to earn half a percent interest? And even if and when interest rates do go up, you’ll still be better off putting your money someplace where it will grow faster.
4. Lend it to your brother in law. There’s a name for money that you lend to in-laws. Say it with me: “Gift.” At least, that’s the way they’ll remember it, especially if you end up getting a divorce.
5. Invest in on a hot, inside tip. It’s a great idea if you get away with it. Unfortunately, most people don’t. And when they catch you, the government takes everything you gained, adds a ton of fines and (best for last) gives you accommodations in the local slammer for a lot longer than you wanted to stay.

Regardless of where you are financially, though, there are some things that are simply a good idea. These include:

1. Get the highest interest rate you can out of your long term savings. A high yield savings account is a good option if you need to have access to your money in case of an emergency but still want a decent rate of return.
2. Only leave enough money in a savings account to handle emergencies. For most people, keeping more than six months’ income in a savings account is a bad idea. Your money can work for you much better in other venues.
3. Regardless of the type of accounts you have, make sure that your financial institution compounds your interest daily. Even with today’s lethargic interest rates, you will come out ahead if your bank calculates and compounds your interest daily. Otherwise, banks often calculate your interest based on the lowest balance of the month.
4. Educate yourself about anything you invest in. This is good advice whether you are investing in mutual funds, real estate, or anything else. It’s better to take your time and know what you’re getting into that to simply put your money into the hands of an “expert” (most of who don’t know much more than you do) and hope that all goes well.
5. Avoid losing money. High risk investments can look attractive, with the lure of enormous potential. Most investors find, however, that in the long haul, you end up ahead by putting your money into safer financial vehicles. Warren Buffett is known to say, “Never lose money.” While we consider that somewhat unrealistic, you’re usually better off sticking with low risk investments.

Some may ask, in light of the low interest rates, whether it’s even worth it to put money into a high yield savings account. The answer is, simply enough: yes. If you are putting your money into a savings account with the intention of actually saving it, that is.

A high yield savings account pays higher interest, but generally come with a few restrictions. Some banks require a large initial deposit and others limit the number of withdrawals you are allowed to make every month. But for those who intend to save money long term, they are considerably better than the typical passbook savings account.

As of this writing, the national average yield on a savings account is 0.21%. High yield savings accounts average around 1.24%. Anyone who lived through the ‘70s, ‘80s, or even the ‘90s will no doubt think that either number is terribly low. So, what difference does it really make to put money into a high yield savings account? There’s only a little more than 1% difference in the interest rates, right?

If you do the math, 1.24% is roughly six times the interest rate that 0.21% is. And while that ratio is unlikely to remain if and when interest rates go up, you can expect that high yield accounts will always be somewhat better than passbook savings accounts.

Even if we assume that interest rates stay as they are infinitely (and let’s all hope they don’t), that modest percentage point of difference adds up to a huge difference over the years. Let’s assume you save $100 per month for the next 20 years. At 0.21% interest, you will end up with $25,787.72; the same amount of money saved at 1.24% interest will net you $28,919.90. We don’t know about you, but we figure that $3,268 (and change) is a fairly sizable reason to consider putting your money someplace where you can earn that extra percentage point of interest.

Of course, there are other investment options with higher return potential. But if you desire the security of a federally insured savings account, you’re still much better off putting your money into a high yield account than into a regular savings account.

So, it’s best to plan what you are going to do with your income tax return well before it gets here. Chances are, you have a pretty good idea of what kind of return to expect based on what you’re received the past several years. Of course, if your income has changed drastically, this may not be true, but even still, you should be able to make a fairly educated guess regarding how much you’re likely to receive.

While there are any number of possibilities regarding what you will do with your return check, here are some that we consider the best possibilities:

• 1. Open a high yield savings account. If you don’t already have an emergency fund sitting somewhere where it will earn you a good rate of return, you should consider showing some restraint with your income tax return (or any sudden influx of cash) and open up a high yield savings account with it.
  2. Go on a vacation. Studies have repeatedly shown that people who take regular vacations realize many benefits, including less stress, fewer family problems, less divorce, and higher satisfaction with life. Whether your income tax return allows you to take a holiday in Paris or a weekend upstate, vacations are always a good investment.
  3. Get a new (to you) car. No, you probably won’t be able to buy the whole thing with your income tax return, but you could use the return money for a down payment. Some car dealerships will even help you file your taxes in return for using some or all of the money as a down payment on a vehicle.
  4. Home repairs. Tax time is a perfect time to put those finishing touches on your home that require extra money not typically available. Whether you’re a do it yourself kind of guy, or hire someone else to do the work, consider using that extra money to add value and livability to your home.
  5. Make a charitable donation. Some people will recoil at this kind of a suggestion. If that’s you, pick a different suggestion or come up with an idea of your own. But many of us see charitable opportunities pass us by throughout the year and think, “I wish I had money so I could help with that.” There’s no better opportunity for most of us than when we receive our tax return checks.

1. Instant Access savings Accounts – This is a post about the reasons a high yield saving account for children is better than one set aside in your own name.
2. Saving Accounts – This blog points out the many benefits of starting a high yield savings account for your child early that you may share in as well.
3. CashMoneyLife – This is a blog that explains the various college savings plans for children with high yield interest rates.
4. FinAid – According to this blog, there are many ways to save money on college just by opening a high yield saving account for your child.
5. Kids Savings Account Info – This article features tips and steps in opening a high yield savings account for your children.
6. Credit.com – This is a blog about choosing the right high yield savings account for your child and what they offer.
7. GoBanking – This is a blog about a high yield savings account being the perfect gift for a young child as the savings bond has fallen out of vogue.
8. Get Rich Slowly – This is a blog about how to choose the best high yield savings accounts for your children through internet comparison shopping.
9. Amateur Asset Allocator – This post compares high yield savings accounts with a few different types of investment options for you, your family, and children.
10. Bible Money Matters – This blog is about using high yield savings accounts to teach children about money.
11. Savings Toobox – This post explains how family efficiency, planning, and high yield savings can keep everyone in the family on track for a steady financial future.
12. Online Savings Accounts – This blog explains what children’s high yield savings accounts are and what they can do for your child.
13. InfoChoice – This is a informational blog about many different types of savings accounts for children, adults, and teens with high yield percentage rates.
14. The Digerati Life – This blog is all about the 529 college savings account for children and its long-term benefits.
15. Bankrate – This blog discusses the many benefits of finding the highest yield savings account that is available and starting your child’s savings account well before nursery school.
16. Invest-What – This is a blog about finding the best online high yield bank accounts and what to look for.
17. Suite101 – This article discusses what the best high yield savings accounts have to offer children, how to find them, and what the current interest rates are revealing.
18. Financial Web – This is a blog that compares high yield savings account rates internationally and reports that the best rates are further away than you think.
19. GoodFinancialCents – This is an article that teaches readers how to shop for the best high yield savings accounts for their children and reap some of the benefits themselves.
20. Livestrong – This is a blog that uncovers which types of high yield savings accounts and educational savings accounts are the best for your newborn.
21. Moolanomy – This blog is a review of SmartyPig, a new online savings account for your children that helps them learn about money and track savings goals.
22. SavingsAccountBest – This is a blog that compares a regular savings account with a high yield youth savings account with remarkable differences.
23. Fair investment – This blog teaches parents about how to find the best high yield savings accounts for your children online.
24. Money Facts – This is a UK-based site that discusses changes to children’s trust funds and why a high yield savings account may be best.
25. Finance – This is a very informative article about all different types of savings accounts and which types of savings accounts are the best and have the highest yield and benefits for children.
26. Kids Savings Accounts – This is a blog that discusses how a kid’s savings account not only gives them a cushion for college but also teaches them about money management without penalty.
27. Articles Base – This is an article about where to find high yield savings accounts for children and how to know what is right for you and your child.
28. Kids Savings – This is a blog that talks about online savings accounts that are linked to local accounts in order to get the highest yield return.
29. Savings Bank Bonds – This is a blog in which the author gives their opinion on the best high yield savings accounts for kids and shares tools for the reader to do their own research.
30. Best High Yield Savings Account – This is a valuable resource for parents to use in finding a high yield savings account for their children that aids in saving and teaching children how to save.
31. Budget Pulse – This article teaches parents how to pick a high yield savings account for a child and what to look out for.
32. DoughRoller – This is a blog about looking for the best savings accounts that are not only high yield but also have the best educational benefits for your child.
33. FiveCentNickel – This is a blog that instructs parents about creating direct subaccounts for their children with high yield interest.
34. Investments – This is a UK-based site that gives advice on investments and high yield savings accounts for children.
35. American Consumer News – This is a blog about the SmartyPig savings account program which boasts the highest yield interest rate to date.
36. PF&I – This is an article that gives simple tips on how to find the right high yield savings account for your child.
37. Money Blue Book – This is a post that review’s Ally’s high yield savings account for children and why you may want to take advantage.
38. My Finances – This is a post that compares different kinds of savings accounts available in the United Kingdom and which ones may be best for your children.
39. My Dollar Plan – This is an interesting post about financial strategies for infants and toddlers.
40. Hot Online Topics – This blog answers some questions about what the difference is between a high yield savings account for children and an investment account.
41. Best High Interest Savings – This article discusses why online banking is a great way to teach your children about money, saving, interest, and goals.
42. Consumerism Commentary – This blog article instructs the reader to look very carefully into the banks in your area and that you personally use because there may be high yield accounts for children that are not advertised.
43. High Interest Savings Account – This article explores the many reasons why a high interest savings account is the best way to teach your child about money management.
44. Savings Account Finder – This blog addresses why there is a real need for children to have their own high yield savings account as early as birth.
45. Money Instructor – This is a blog that focuses on a few different types of savings accounts and what their advantages are so you may decide which is best for your child.

Image Credits: sushi♥ina

1. Why the Economy has Nothing to do With Investing: See what one blogger says about investing your money and dealing with the economy around you.
2. Should You Enroll in Your Company’s 401(k)?: One blogger shares their opinions on whether your should risk joining your company’s retirement programs.
3. High Interest Alternatives: There are other ways to save your money and get a great return.
4. High Yield Savings Accounts: Read about this great account and the high rate they are offering.
5. Bank of America’s Rates: According to one report Bank of America’s rates are about average when compared to other high yield savings accounts.
6. Best High Yield Savings Accounts: Find out which accounts you need to get when it comes to a high yield savings account.
7. Best Accounts for 2010: Debt Kid blogger shows you a chart with the best accounts, rates and where you can find them.
8. Current Online Savings: Learn what the current rates are for online rates for high yield savings accounts are and where you can find those accounts.
9. Best Online Savings Accounts: If you are considering an online savings account, look at this list to find the best high yield accounts out there.
10. Savings Accounts.Com: Find a list of great savings accounts you can get. Use this site to help determine if you want an online savings account or would prefer a walk in bank.
11. High Rates to Attract Customers: One article shares how banks will offer you a higher rate on your savings account to get you into their bank. This could mean you have to open other accounts to get that high rate.
12. Best Yield in 2010: Find out which account will give you the best yield of all the accounts out there this year.
13. One High Yield Account: Look at this rate you could be getting if you choose to go with this account. Also learn why high yield savings accounts are important.
14. High Yield Offers: There are always new offers being added to banks. Find out what the new offers are now and what you could be earning.
15. Examples of Accounts: Take a look at this internet bank’s offerings. You can choose from different balance requirements, rates and more to fit your account to your needs.
16. Go Talk Money: This site can help you find the best savings account with the highest rates for your needs.
17. Are High Yield Rates on Their Way Down?: Read what one blogger is saying about rates going down.
18. One Account to Choose: Read about this great savings account with a high rate that you could qualify for.
19. Compare Accounts: The Bank Lady pulls together some accounts and compares them for you so that you can see which is right for you.
20. Best Online Banks: Look at this list to help decide which online account best suits your needs.
21. Direct Huntington: Research this savings account and see if it is right for you.
22. What is the Best Online Account: This blogger helps you to find that out. Compare some of the accounts and rates that are out there for you to choose from.
23. The Best High Yield Accounts: Take a look at the best high yield accounts out there. Find out which works better for what you want to do with your money.
24. High Yield Alternatives: Find out what you could choose instead of doing a high yield savings account. There are other options that may earn more money.
25. Smarty Pig: This account has just raised their rates. Find out what they are now and why to choose this account.
26. High Yield Rates: Try using this chart to help you decide which account to go with. This blogger compares several different accounts.
27. Comparisons: Look at these comparisons of several different accounts. Find the best choice for you by doing your research.
28. Discover Bank Review: See this review of Discover Bank. Learn about their accounts and what this blogger thinks of them.
29. Shore Bank Account: Learn about this new account that is being launched online. See what this bank has to offer you.
30. How to Choose Your Account: Get tips on how to choose your high yield account. Different people will need different types of accounts to fit your needs at the time.
31. Money Aisle: Find out what you should look for when you are choosing a savings account.
32. FNBO Direct Review: Find out what some say about this new high yield savings account. Check this out to see if this will work for you or if you should stay away.
33. Review of the Best Online Accounts: Read these reviews to see which accounts are in the top of the line up. Learn which ones are good and which ones you should steer clear of.
34. Compare CD and Savings Account: Discover which account most recommend. If you are trying to figure out whether to go with Certificate of Deposits or with Savings, look here to see what they say.
35. High Yield, Secure and Good Service: Look at this account and the great options that come with this new FNBO account.
36. Welcome the High Yield Savings: Read about different accounts that you can get to earn great rates on your money.
37. Salem Direct: Take a look at these great accounts offer online for your checking and savings.
38. Univest Direct: Try this online account for your savings. Learn the rates offered as well as other perks you can get from using Universt Direct.
39. Sallie Mae Account: Learn about the new Sallie Mae high yield savings accounts available. You may look to switching once you hear about it.
40. 3% High Yield Savings: Find out where to get this great rate on your next high yield savings account.
41. Don’t Chase High Rates: Learn why one blogger says not to chase the high rates on your savings account.
42. High Interest with Good Yields: Learn which accounts many people recommend. Find out why they say you should choose these accounts.
43. Stop Chasing Rates: See why one blogger says to stop chasing rates on savings accounts with your checking account.
44. High Yield Installment Savings: Learn what this type of savings account is and how you can get a great yield on these.
45. Make $25 in Ten Minutes: Learn how to make $25.00 in just ten minutes with your ING Direct Savings Account.
46. Best High Rate Accounts: Take at look at this bloggers pick for the best high rate accounts available right now.

Image Credits: baslow

Banking online can save you money and a lot of time – one of the greatest benefits of using the internet is the convenience factor.  You can conduct financial business, shop, and entertain yourself using the internet.  Gone are the days of fighting crowds and traffic because you can shop and telecommute using your desktop or laptop.

You can pay your bills online – most of the financial and retail websites online provide you with the added convenience of paying your monthly bills, shopping, and conducting your financial business with a simple click of your mouse.  It is one of the key reasons that opening an online high yield savings account has become so popular.

High yield accounts are readily available – this is actually a double-edged sword.  It’s a matter of being convenient, but because there are so many online financial institutions out there that offer high yield savings accounts, your choice could be a challenging if not frustrating task.

Budgeting is still the key – whether you are opening a high yield savings account at a land-based financial institution or on the internet, you still need to consider what your budget will allow as far as your deposit activities are concerned.  The key consideration to opening a high yield savings account, whether it is in the traditional brick and mortar establishment or online is what your monthly budget can bear.  Although, there is little likelihood that you will lose your investment unless that financial institution fails, you still have to pay your bills and keep a roof over your head.

Ensure the safety and security of your money – beware of scams and other fraudulent websites because there are still plenty of them out there, especially in the high yield savings account market. The primary rule of thumb to follow is that if what the financial institution is offering you seems too good to be true, then it probably is.  It is always better to be safe than sorry so make sure that you read all their privacy statements and familiarize yourself with their terms of service.

Internet banking has become extremely popular for a number of reasons.  There are advantages and disadvantages whether you do your banking online or if you prefer the brick and mortar type of banking.  Choosing between the two forms of high yield savings account banking is a matter of personal preference.  But there are other considerations to look at as well.

For instance, nothing exceeds the convenience factor when it comes to handling your banking online compared to having to leave the comforts of home where you have to fight the traffic and then the crowds.  Most individuals that have turned to doing their financial business online have done so for this very reason.  However, there are a number of other aspects that you should consider when you are trying to decide between opening a high yield savings account at your land-based bank or signing up for an account with an online financial institution.

In most cases, the majority of us are concerned with the safety and security of a high yield savings account opened at a financial institution that we only see on a computer monitor rather than one that we can physically walk into and conduct business with a live person.  Although this is still a major concern with many individuals, online high yield savings accounts are now safer than ever before.  In fact, more and more people are opening these types of high yield savings accounts everyday.

It’s all about performing the due diligence and research before making a decision about whether to open a high yield savings account online or at a land-based financial institution.  Trust is still a huge issue with a lot of people so this is an understandable component of the decision making process.  But common sense is even a bigger issue because it’s all about the best return on investment.  I’ll discuss some additional steps that you should take when you are trying to decide between a land-based high yield savings account or one on the internet in another one of my blogs.

The only concern you will have with high yield savings accounts is the fact that there are so many offered right now at both land-based financial institutions as well as online.  If you’re a brick and mortar type of investor then by all means check with your current bank to find out if they offer these types of savings accounts.  Otherwise, there are a lot of options available online.  You just need to be confident that these are safe and secure websites before investing any money.

When you approach your bank about a high yield savings account, be sure to find out what all the requirements or stipulations are.  There may be daily balance and opening deposit criteria that you need to comply with if you want one of these accounts.  If by some chance, your bank has nothing to offer that seems equitable, then you should start searching the internet for something that meets your financial needs.  There is no point in sinking more money into a standard passbook account when there are better options available.

I have always recommended a safe and trusted high yield savings account online to people who inquire about this issue because of the fact that they have a lower overhead and don’t need to charge some of the fees that the brick and mortar entities do.  These accounts typically pay higher interest rates with smaller required deposit amounts.

The downside is that you have to manually perform a lot of your business without the assistance of a live human being.  So you might want to check with another land-based financial institution if your bank does not offer high yield savings accounts.  Chances are whatever financial institution you decide to go with, they are going to have a website.  You can always monitor your account without the hassle of spending the time you normally would fighting the traffic you would encounter when driving to your bank.