What You Need To Know About High Yield Savings Accounts

Understanding how to make your money work for you is crucial given the rising cost of living. You may maximize your profits and save more money with a high yield savings account. With a high yield savings account, you can maximize your returns and get more bang for your buck.

You might want to start investing or store money for a rainy day. Your money would be wisely placed in a savings account. However, there are other varieties of savings accounts available, so you should do some research before selecting one.

As you may have heard, the interest rates on savings accounts are really low these days. But is it possible to make more money off your money using a high yield savings account?

What you need to know about high yield savings accounts, including how they operate, who is eligible to start one, and how much money is required to do so, is provided below.

Understanding The Different Types of Savings Accounts

New to the world of savings accounts? Wondering what the difference is between a high yield savings account and a regular one? Well, you’re not alone. We’ve all been there!

Understanding The Different Types of Savings Accounts
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Let’s start with the basics. What does high-yield mean in savings account? In financial terms, it refers to how much interest your bank pays you for keeping your money in their account. The higher the yield, the better deal you get—which is why banks are always trying to find ways to outdo each other on this front.

You probably just thought that all savings accounts were the same. But there are three savings accounts: high yield, money market, and regular savings account. These different types of accounts can help you earn more with your money.

High Yield Accounts

A High Yield Savings Account (HYSA) is a peso account wherein funds of a specific amount are given pre-determined competitive rates for a fixed term as defined by the Land Bank of the Philippines (LBP). The idea behind an HYSA is that you build moderate-term savings by depositing money into the account, then waiting for it to grow over time.

Money Market Accounts

Money market accounts are like high-yield savings accounts in that they offer higher interest rates than traditional bank accounts. Businesses and organizations typically use money market accounts to keep large amounts of cash at hand without worrying about fluctuating rates.

Traditional Accounts

Traditional savings accounts typically pay lower interest rates than high yield or money market accounts because they are considered low-risk investments by banks and, thus, don’t require much risk management on the bank’s part.

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Who is Eligible for HYSA?

Interested in receiving interest on your savings? You can earn more interest on high yield savings accounts than on standard savings or checking accounts.

But they also come with additional requirements that make them worth the effort only if you can meet them. The interest rate varies depending on the amount that you invest, and Landbank offers this type of savings account to institutional clients only such as the following:

  • Corporations (Private or Government-Owned)
  • Foreign Corporations
  • Government Financial Institutions
  • Unincorporated Units of the Government
  • Joint/Venture/Consortiums
  • Registered Association or Organizations
  • Local Government Units
  • Barangay Local Government Units
  • Registered Cooperatives

LBP Features of High Yield Savings Accounts

  • Php 1,000,000 minimum balance required or initial deposit.
  • Savings Term ranges from 30 to 360 days only.
  • Annual interest rates depend on Landbank’s posted rates, terms, and amount.
  • HYSA Passbook serves as proof of investment
  • Insured by the Philippine Deposit Insurance Corporation (PDIC) up to Php 500,000
  • Penalties/ fees include a pre-termination penalty, the replacement fee for lost/damaged passbook, and documentary stamp tax.

What You Need To Open An HYSA

The requirements depend on the type of institution you are. It can be a bank or any other financial institution. Suppose you want to open up your high-interest savings accounts in a bank. In that case, they will require you to present documents and information such as Articles of Incorporation and By-Laws, Certificate of Registration with Securities and Exchange, Joint Venture Agreement, etc.

You can also check this link to view the complete requirements by the Land Bank of the Philippines based on the type of institution that wishes to avail of this type of account.

Is a High Yield Savings Account a Good Idea?

While high-yield savings account is excellent for those, who want to grow their money quickly, knowing the risks of a high-yield savings account is also good. Before you decide whether high-yield savings accounts are right for you, here are some things to think about:


High-Interest Rate

The first advantage is that the interest rate is much higher than what you would receive from a traditional checking account. This means your money will grow faster than it would if you kept it in a regular checking account.

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There are also banks with high interest rates in the Philippines that offer multiple savings accounts, such as the Optimum Savings of BDO Unibank, the BPI Advance Savings Account, and the BPI Maxi-One Checking Account. On the other hand, the Malaysian digital bank, CIMB, is growing in popularity due to its high-yield savings account the Philippines, which offers around 2.5% interest per annum, plus you get free life insurance if you keep a certain amount in your maintaining balance.

Flexible Withdrawal Options

Some High Yield Savings Accounts allow you to make withdrawals without incurring early withdrawal fees or other penalties. Others allow you to take out only a certain amount each month, so checking your agreement before making a withdrawal request is best.

No financial or investing knowledge is required!

Like most people, you’re probably worried about investing in stocks because it sounds like much work and requires much knowledge. But with a high-yield savings account, you must open an account and deposit money. There’s no need to manage your portfolio or keep track of trends that could affect your investments—deposit funds as often as possible and let the interest come in!


Limited withdrawals

High Yield Savings Accounts usually have limited withdrawals. This means you can only take out a certain amount of your money each month. Your account will be charged a certain amount if you exceed this limit. This prevents people from withdrawing all their money and losing it through bad investments or other risky behavior.

Interest rates may vary.

High yield savings accounts typically offer interest rates that are higher than those provided by conventional banks. Interest rates, however, might differ from bank to bank and from account to account. While some high yield savings accounts feature variable interest rates, others may offer a fixed rate of return.

Minimum Requirements

One of the disadvantages of a high yield savings account is that you might have to meet specific minimum requirements before you can open one. These requirements can include having a minimum balance, maintaining a certain account type for a set period of time, or even having an existing relationship with the bank that offers the account. If you don’t meet these requirements, you might not qualify for a high yield savings account.

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Should You Invest In Real Estate or Open an HYSA?

If you’re looking to invest in a house and lot for sale or a luxury condominium, the first question might be: Should I buy a luxury real estate or open an HYSA?

Should You Invest In Real Estate or Open an HYSA | What You Need To Know About High Yield Savings Accounts
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The answer is simple: It depends.

Investing in luxury real estate or opening an HYSA depends on your goals and how much time you have to reach them. If you’re ready for a significant return on your money, you can buy a luxury house and lot in Tagaytay or a luxury house and lot in Laguna. You can even look for condominium for sale or house and lot for sale in the country’s primary tourist destinations, such as Baguio and Davao. So, if you want to grow your nest egg slowly over time, opening an HYSA might be just what you need.

One of the primary benefits of investing in luxury real estate, such as Brittany Corporation, is its steady income stream. You still have income from your investment properties even when the market is down. Suppose you take out a mortgage against your property. In that case, this also helps protect your assets from fluctuations in the market because any money owed on loan will be paid back regardless of what happens with prices over time.

With both types of investments being available now, we must understand which one suits us best before making any investment decisions!

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Final Thoughts

These days, you don’t have to be a financial expert to make smart moves with your money. Do your research and start with the basics, and you should be able to pick up on what you need.

A high yield savings account gives you all the benefits you want from a bank with an interest rate that keeps pace with inflation. Be sure to search online for the best interest rate available. If you open an online high yield savings account, choose one PDIC insured for your protection and peace of mind.

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