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Is a High-Yield Savings Account Really Worth It? · Becoming Financially Confident

• 0:37
  You finally started saving money.
• 0:39
  Then someone asked you the question you weren't expecting, is it in a high yield savings account?
• 0:44
  And suddenly you're wondering if you've been doing it wrong all along.
• 0:49
  So today let's answer whether switching banks is really worth it.
• 0:52
  And this question has become much more common over the last couple years.
• 0:56
  And honestly, the answer depends on understanding one simple principle.
• 1:00
  I'm going to share that with you on today's show.
• 1:03
  So let's make sure your savings are working just as hard as you are.
• 1:16
  Hello and welcome to Financially Confident Christian.
• 1:19
  My name is Ralph Estep Jr.
• 1:20
  and I call myself the Financial Evangelist because I try to marry two worlds together, and that's faith and finance.
• 1:28
  And today I want to talk about something that sounds complicated, but it's really not that complicated.
• 1:33
  We got a great listener question.
• 1:35
  Listener asked, should I move my savings?
• 1:37
  They asked, what is a high yield savings account and is the extra interest worth it?
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  And here's the thing I'm going to tell you right now.
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  All of us work so hard for every dollar, so it's natural to want to see them growing instead of sitting still.
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  And that's what I'm going to answer on today's show.
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  But right now, maybe you've got a question.
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  Maybe you're thinking about Ralph.
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  I've got to make a difficult decision.
• 1:59
  I would love to help you with that decision.
• 2:01
  You can send your question by going to financiallyconfidentchristian.com/question We'll put a link in the show notes, but again, that's financiallyconfidentchristian.com/question Now, I want to read the subject line today because when I saw this in my email, I said,
• 2:20
  oh, this is one I got to cover.
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  And this is what it said.
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  It says, am I losing money by keeping my savings at a local bank?
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  And that piqued my interest.
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  Well, let's get right into the question.
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  Listener writes this.
• 2:30
  Hi, Ralph.
• 2:31
  I've always banked at the same place my parents used.
• 2:34
  My savings account has been there for years and honestly, I never thought much about it.
• 2:39
  Recently, one of my co workers mentioned they're earning over 4% on their savings while mine is barely earning anything.
• 2:46
  Now I'm wondering if I've been missing out.
• 2:50
  Moving my money feels like a hassle and I don't want to make things more complicated than they need to be.
• 2:56
  Ralph, is a high yield savings account really worth opening or is it just another financial trend everyone is talking about?
• 3:03
  I'd love your thoughts.
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  Thank you.
• 3:06
  All right.
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  Well, you asked for it.
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  And you are going to get my thoughts today.
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  Where you keep your savings does matter more than many people realize.
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  Because the thing we have to accept at the beginning, the truth about savings.
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  Savings should be safe, it should be accessible, and it should be growing.
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  Well, let's talk today about how to make that happen.
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  So let's start by understanding what it actually is.
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  A high yield savings account is still a savings account.
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  Your money is still what we call liquid.
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  It's still available.
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  The big difference is the interest rate.
• 3:41
  And the interest rate can be a big difference.
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  Many online banks pay significantly more than traditional savings accounts.
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  What you said is that, Ralph, my, the bank that I've spent all my life with is the bank my parents used.
• 3:54
  And that's a very common situation.
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  But there are a lot more options out there.
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  Internet banking has made this a lot more easy to get to.
• 4:03
  And here's the thing you gotta understand, if the interest rate is higher, that interest compounds over time, your savings deserves to earn more than pennies.
• 4:14
  So this is a really important discussion today.
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  But you got to remember the purpose of savings.
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  Now we're going to differentiate two things.
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  Emergency savings are not investments.
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  These aren't the things you're planning for retirement.
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  Emergency savings, first job and main job is protection.
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  Is it there if you need it?
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  We talked a lot about this on yesterday's show.
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  Do I save first or do I pay off debt first?
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  The first job of emergency savings is to protect you.
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  The second job of it is accessibility.
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  It's got to be there when you need it.
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  The growth of it is an added benefit.
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  So here's the thing you got to understand from the beginning, don't chase those returns at the expense of safety.
• 5:00
  I'll talk about why that matters here in a moment.
• 5:02
  But the purpose of your emergency fund isn't to make you rich, it's to keep you secure.
• 5:10
  So we got to talk about that for a second.
• 5:11
  Because I used to work in the credit union industry, I, I understand the other side of this.
• 5:17
  You've got to make sure your money is protected.
• 5:19
  There are a whole lot of emails, online scams and all those sort of things going on there trying to get you to take your money and move it somewhere.
• 5:28
  So the first thing I'm going to tell you is make sure that the bank you're choosing is an FDIC insured bank.
• 5:36
  Now, I'm going to throw one more caveat into this or a ncua, which is the National Credit Union Administration Insured bank.
• 5:43
  What that means basically is the government is saying These banks, these credit unions are safe when that.
• 5:50
  And what that means to you is that deposits remain protected within insurance limits.
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  There's a certain limit.
• 5:55
  I'm not going to get into that today.
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  It's a big number.
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  It's not what we're talking about today, but it's basically saying that no matter what happens, your deposits are safe.
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  So the first thing you've got to do is research those institutions before opening an account.
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  Like I said, there's a lot of scams out there.
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  The FTC is putting these out all the time.
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  So don't let the unfamiliarity with them create unnecessary fear.
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  You can go out and do a deep dive on each of these banks, each of these credit unions to know, are they FDIC insured?
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  Do they have a good track record?
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  Go look for reviews on them.
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  Because as a good steward, it includes doing due diligence.
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  That wisdom that we have to work with says to us we've got to ask questions before moving money.
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  Which leads me to this.
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  Don't chase every rate change.
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  We are living in an interest rate changing environment right now and interest rates are changing.
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  And I see so many people chasing after that.
• 6:52
  I see people moving from this bank to this bank to this bank every single month chasing just tiny differences.
• 7:00
  I think you've got to find a trustworthy institution.
• 7:04
  I love the fact that you said your parents have been banking here forever.
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  But here's the thing, that doesn't mean they're the most effective for you.
• 7:11
  That doesn't mean they're most effective for your savings.
• 7:14
  But on the other side of this, you got to keep your financial life simple.
• 7:18
  I'm going to say it on the show today, I'm going to say it many more times because it's so true.
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  Consistency usually wins over constant switching.
• 7:26
  I talk on the show all the time about financial peace.
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  A peaceful financial life is often a profitable one.
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  But over and above all those things, and I hope I've answered your question today, I feel like I have.
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  High interest rate, high yield savings accounts are great things.
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  But the thing that really encouraged me most about this is you've been saving.
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  So if you're listening today, you're watching me keep saving.
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  That's a beautiful thing.
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  The interest rate does matter.
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  But what matters more than that is that habit, that decision every time you get paid or once a month, whatever that looks like for you, you're doing it because a higher rate is never going to replace consistent deposits.
• 8:06
  You know, I talk about it on this show.
• 8:08
  I use the word preach about it on the show all the time.
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  Automate your savings and let time do the work.
• 8:15
  I know you didn't ask this question, but the biggest contributor to your savings isn't the interest rate.
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  It's your consistency.
• 8:23
  But I want to get a little deeper because sometimes we think being a good steward only means working harder.
• 8:30
  But stewardship also means making wise decisions with what we've already been given.
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  Now here's what faith doesn't promise us.
• 8:38
  It doesn't promise us that money will multiply without our effort.
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  We can't pray big returns on our money.
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  It doesn't promise us that every financial decision is going to be obvious to us.
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  And unfortunately, it doesn't promise us that you'll never make mistakes.
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  Because guess what?
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  You're going to make mistakes.
• 8:58
  But here's what fate does promise us.
• 9:01
  We have a God that delights in faithful stewardship.
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  He relishes in when he gives us things, he lets us use these things.
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  And we steward him well.
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  And when we're intentional with even small resources, friend, we're honoring the one who entrusted them to us.
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  Stewardship in your financial life includes learning new things.
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  That wisdom that you're gaining is going to grow over time.
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  And those small improvements matter.
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  Remember this faithfulness isn't measured by the account size.
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  It's measured by obedience.
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  So don't underestimate the power of small wise decisions repeated over many years.
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  And you're already doing that.
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  Your savings have a purpose.
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  Give them a place where they can quietly grow.
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  Make those small improvements today, because those can become huge blessings tomorrow.
• 9:52
  So here's your win for today.
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  I want you to review your current savings account rate.
• 9:56
  A lot of people don't know what that is.
• 9:58
  Check the interest rate, go look at the bank and see what is it paying me and then compare it with reputable high yield savings accounts.
• 10:05
  Now, your particular bank might even offer these.
• 10:07
  It might be as simple as setting up another account at your bank and then decide which one makes sense.
• 10:14
  But if you don't hear anything else I say, maybe you've got a great rate already.
• 10:18
  Automate that monthly savings if you haven't already done it.
• 10:22
  The knowledge that you're building is going to lead to better stewardship.
• 10:26
  Well, let's get into our Bible verse today.
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  It comes from the book of Luke, chapter 16, verse 10.
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  It says if you are faithful in little things, you'll be faithful in large ones.
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  And I just love this verse because I think God is just telling us something so important here.
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  That act of stewardship starts small and it grows from there.
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  Every dollar that you have matters and that faithfulness that you're growing towards, that financial peace you're looking for, it grows through everyday decisions.
• 10:59
  That consistency and let me tell you right now, God values consistency.
• 11:04
  How about we pray together?
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  Heavenly Father, I want to thank you for every resource you've entrusted us to us.
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  Lord, you are so good to us.
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  Teach us to steward our savings wisely, Lord, and help us make thoughtful decisions instead of the emotional ones that we find our flesh in.
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  Give us discernment as we plan for the future, Lord, and may every financial decision we make reflect our trust in you and our desire to honor you, Lord.
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  Help us to remain faithful with little so you can trust us with even more.
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  And we ask this in Jesus name.
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  Amen.
• 11:41
  Friend.
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  Today you learned a very valuable lesson where your saving sit matters.
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  So keep your money safe, let it earn what it reasonably can and stay consistent with those deposits.
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  Because trusting God while practicing wise stewardship is the goal.
• 11:57
  So here's my takeaways for today.
• 11:59
  Understand how those high yield savings account work.
• 12:01
  Make sure that you're prioritizing safety first, don't chase those rates, build that consistent saving habit and by all means practice faithful stewardship.
• 12:12
  What a great question today and if you've got a question for the show, I would love for you to tell me about it.
• 12:17
  You can leave me a voicemail message by going to financiallyconfidentchristian.com/voicemail we'll put that link in the show notes.
• 12:25
  You just click on the link and it's super easy.
• 12:27
  Just record your voice and I will hear it and I might even play it on the show.
• 12:31
  That's financiallyconfidentchristian.com/voicemail thank you so much for joining me today.
• 12:37
  As I always say, I want to encourage you today, especially today, stay financially savvy, get more knowledge, get more wisdom and be a good steward of what you have.
• 12:48
  May God bless you and you have a truly great day.
• 13:03
  Ra.