3 Features of My Ally High-Yield Savings Account Help Me Earn Interest

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  • I used to keep my money in a typical bank savings account earning next to nothing in interest.
  • My husband convinced me to switch to an Ally high-yield savings account and I’ve never looked back.
  • Roundups, easy-access CDs, and other features help me maximize my interest earnings.

Three years ago, before my husband and I were married, we sat down and shared our entire financial portfolios with one another. Within just a few seconds of showing him that I stored all my cash in a savings account that generated 0.01% APY, he reacted with panic.

I had no idea that my money would grow faster if it was in a high-yield savings account with a much higher annual percentage yield.

Since moving my money into a high-yield savings account at Ally, where the APY is currently 2%, I’ve been able to grow my cash and take advantage of perks offered through my account that help me earn more money every year. Here’s how I maximize those features.

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1.90% APY (as of 09/15/2022)

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I swap between the HYSA and a flexible CD

During the pandemic, when the Federal Reserve lowered interest rates, the APY for my high-yield savings account dropped, and the money in my account was earning less than before (it went from over 2% to 0.5%).

One of the perks of Ally is that they often offer special and limited deals on high-interest-earning CDs. I put a large chunk of money, for the first time, into a CD that offered 2% interest, with no penalty for withdrawing the money.

Because it was so easy to transfer the cash back and forth, I moved money in and out of the CD when my high-yield savings account APY climbed back up again.

Comparing these rates to my old bank, I noticed that the APY and promotional CD rates were at least 50% higher.

My account offers a roundup program

One perk Ally offers is a roundup program that’s tied to my checking account. When I make transactions with my debit card, the bank automatically rounds up the purchase to the nearest dollar and then transfers that money to my savings account once it hits $5. For example, if I buy something for $6.50, the bank will take an extra $0.50 from my checking account and make note of it to eventually move to my HYSA.

While making transfers between my checking and savings is something I can do manually, and do often, having this round-up program helps me accumulate even more money in my HYSA without thinking about it.

My HYSA compounds interest daily

One thing I never realized about my savings account at my old bank was that the money in the account compounded interest monthly, which means any money deposited today will only grow once a month, and then that new balance will grow the next month.

My current bank compounds interest daily, which means every dollar that gets put in automatically starts to grow at a faster rate than it would if the compounding happened monthly.

Since I often deposit money a few times a week, the daily compounding of that cash helps me earn more money every year.

I don’t have to pay any fees

With my old savings account, I was hit with an $8 monthly maintenance fee if I didn’t have a daily balance of $500. While the fee seems low, it can add up over the year and take away from growth.

A perk of my current HYSA is that there is no minimum amount that has to be in the account and no monthly maintenance fees. This helps me keep my cash in a place that’s growing on a daily basis, without having to worry about getting charged fees along the way.

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