The situation for savers has changed dramatically over time. A few years ago, it was really difficult to find investment vehicles that remunerated savings at a high interest rate. With interest rates at or below zero, in the case of Europe, the alternatives were limited. That changed more than two years ago, as inflation accelerated and central banks were forced to raise interest rates, allowing conservative savings to be remunerated again.
At present, the number of products offering interest on savings is very high. However, most of them offer a small remuneration with respect, for example, to interest rates. To get an idea, the average remuneration of term deposits barely reaches 2.4%, according to data from the Bank of Spain, a far cry from the current price of money, which exceeds 4%. Therefore, a different and very attractive option for savers are the so-called high-yield savings accounts and even better: savings portfolios.
What is a high yield savings account?
A savings account is a secure savings product in which you deposit your money in exchange for receiving a remuneration, which is usually higher than that of other savings products such as deposits or standard current interest-bearing accounts. To give you an idea of what high yield means.
Traditional’ savings account vs. high yield remunerated account
In the following table, you will be able to see the differences between the two main savings products with which you will always have your money available:
| Interest-bearing current account | High-yield interest-bearing account | |
| Remuneration | Conservative | High |
| Capital security | High | High |
| Money availability | Always | Always |
| Minimum and maximum balance limits | Reduced | No limits. |
As you can see, both products are similar, except for the remuneration they offer, since savings portfolios allow you to obtain a higher profitability peak without losing security for your capital. Another important point is also the limits imposed by both.
High-yield savings accounts: why choose them?
The main feature of high-yield savings accounts is precisely that, they offer a higher profitability than other similar products. The reason is that they are designed precisely to attract the savings of users, while the current remunerated accounts, which are typically offered by banks, what they really seek is to attract customers, not their money, since they typically serve as a gateway to then offer credit products and especially their investment products.
Features of high-yield interest-bearing accounts
If you are thinking about choosing a product to grow your savings safely, keep in mind that high-yield savings accounts offer you:
- High interest: savings portfolios are in fact mixed products, which allows them to offer an extra peak of profitability compared to their competitors, but without putting the savers’ capital at risk. This peak of interest is the main characteristic of this product.
- Total liquidity: savings portfolios, like accounts, are liquid products, i.e., you can get your money back whenever you want. This, for example, does not happen with Treasury Bills, which you have to sell on the secondary market and can lose money; or with deposits, which will penalize you for withdrawing the money.
Savings portfolios: a step beyond high-yield interest-bearing accounts
If after this article you think they are one more product to consider for investing your savings, you may be interested to know that there is a product that surpasses high-yield interest-bearing accounts: savings portfolios. These types of savings vehicles generate a higher return than other products, thanks to the fact that they work like a stock fund. That means that they are composed of public fixed income assets of maximum guarantee, but they are also complemented by corporate debt securities, so that they can generate an extra peak of profitability.
In addition to the above, they also have other advantages, such as:
- Allows the user to benefit from interest rate increases.
- It does not usually have limits.
- You can get the money back whenever you wish, without penalties.
- Tax benefits; no taxes are paid until the money is withdrawn.
Investing in a savings portfolio: meet inbestMe
One last detail to take into account if you opt for a savings portfolio is to make sure you choose the right fund manager to deposit your money with. Firstly, because depending on the firm you select the profitability can be higher or lower, in fact, the platform inbestMe) has one of the highest, offering up to 5%, which exceeds the rest of the products. But it is equally important that you understand the costs associated with it, since if it has commissions (for example when depositing or withdrawing money) the total profitability that you will receive is lower.
Therefore, a good option is inbestMe, since it is a robo-advisor with a long history in Spain, with several awards, and that not only cares about offering you a higher profitability in their products, but their costs are much lower than those of other actors such as banks. In addition, it has an extensive catalog of investment products with which to complement your savings portfolio. So, if you want to find a profitability for your savings, you should know that you are in the best moment and with inbestMe you are in the best hands.
