High Yield Savings Accounts
An overview of High Yield Savings Accounts
- A High Yield Savings Account offers higher interest rates than your Regular Savings Account.
- You must maintain a specific Total Relationship Value (TRV) with the bank offering High Yield Accounts.
- You can enjoy higher interest rates with increased TRV.
- The minimum balance requirements for such accounts is typically high.
- You can also avail of fee waivers as your TRV increases.
A Savings Account is one of the first investments for every individual. The entity where you maintain the Savings Account rewards you for using their product by offering interest on your deposits. However, the number of banking and non-banking institutions has rapidly increased over the years. Today more than 34 private and public sector banks, with over 22,000 branches, exist in India. With so much competition in the banking sector, banks have to get creative and offer exciting products. A High Yield Savings Account is one such product launched specifically for affluent customers. Let us understand it in detail in this article.
What Is High-Yield Savings Accounts?
A High Yield Savings Account is a type of Savings Account offering interest rates that are relatively higher than what you could get on a Regular Savings Account. This account is essentially designed for affluent account holders and high net worth individuals. The High Yield Savings Account comes with exclusive privileges and benefits, including designated relationship managers offering a host of services ranging from financial planning to investment advisory services and more.
Features of a High Yield Savings Account
As is apparent from the term ‘High Yield’, this Savings Account comes with a significantly higher interest rate on deposits. Essentially, banks have different Savings Account Interest rates slabs for High Yield accounts. The interest rate depends on the total balances maintained in the account on an annual basis.
High Minimum Balance Requirements
A High Yield Savings Account with high interest rates typically comes with a high initial deposit requirement and high average minimum balance maintenance. You must ensure you maintain the required balances in your account all the time. Failure to maintain the required minimum balances may result in you having to pay hefty penalties.
Total Relationship Value (TRV)
The TRV is the sum of all balances of accounts held with the bank, including balances in Savings Account, Current Account, Credit Card Accounts, Loans and Insurances. To avail of high-interest rates, you must build a very high TRV, usually over INR 30 Lakh in a specified timeframe.
Waivers and Discounts
You can upgrade your High Yield Savings Account at your convenience. Every upgrade can qualify you for exclusive benefits like waivers on specific charges with an increase in the TRV, no annual fees on debit cards, no liabilities on lost or stolen cards etc.
In recognition and appreciation of your business with the bank, you also get some bespoke privileges with a High Yield Savings Account. For instance, you get dedicated banking and relationship management services, high amount daily cash transactions, credit cards with high credit limits, financial planning and investment advisory services, etc.
The best High Yield Savings Account offers you attractive interest rates compared to conventional Savings Accounts. It is the ideal place to park your funds for everyday business transactions while growing your corpus gradually. You can open the account online in minutes.
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*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.