A “High Yield” Checking, Savings and Brokerage (sometimes called Money Market) accounts are a place to put your money when you needed to gain extra interest over what you received in a “regular” account.
These days many accounts offer “teaser” or “subsidized” account interest rates in an effort to win new clients. Others offer virtually no interest at all.
Money in a high yield account is typically “liquid” meaning you still having access to the cash in your account whenever you like and you don’t have to wait until the money “matures” for you to get to it (as would be the case with a CD, Bond, Annuity or other contract).
In a high yield account, you can typically use the money today if you wish.
High yield accounts encourage individuals and businesses to “lend” their money to the banks, credit unions and brokerage firms. In return the institutions provided solid interest income. Often you need to have a minimum balance in the account (say $5,000 for example) to receive the high yield rate (as opposed to the regular and lower rate).
Checking and savings accounts are managed by banks and credit unions. Brokerage accounts are managed by brokerage firms. Some brokerage firms have relationships with banks that allow the brokerage firm to call an account a checking or savings account.
It is important to know a few things about putting cash into any account with the goal of obtaining better interest income than the income you are currently receiving.
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