Pay attention to restrictions that sometimes come with HYSAs. For example, some sings accounts limit the number of withdrawals and transactions you can complete in a month. Others might require a minimum deposit to open an account or he limits on your APY based on your balance.
How traditional sings accounts workTraditional sings accounts work the same as HYSAs. However, unlike high-yield accounts that are often found online with no brick-and-mortar branches, traditional sings accounts are usually held at banks that he physical branches.
In some cases, you can get above-erage yields with more traditional accounts held at local credit unions and community banks with physical locations, but often the best sings rates are found with online-only accounts.
Traditional sings accounts might he transaction limits, deposit requirements and tiered rates based on your balance.
HYSA dependency on Fed rateThe Federal Reserve meets eight times a year to announce its benchmark federal-funds rate (sometimes called the Fed rate). This is the rate banks charge each other for short-term lending. High-yield sings accounts are highly dependent on the Fed rate.
When the target rate rises, sings yields generally rise as well. For sers, this can mean higher returns for letting their money sit at a bank or credit union. On the other hand, when the Fed cuts its benchmark rate, yields tend to fall.
Sings yields can fluctuate regularly, but they are most likely to significantly change when the Federal Reserve announces a cut or increase of its benchmark rate.