{"id":18892,"date":"2025-01-09T15:24:20","date_gmt":"2025-01-09T15:24:20","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/finance\/a-look-at-the-current-mega-high-yield-savings-account-landscape\/"},"modified":"2025-01-09T15:24:20","modified_gmt":"2025-01-09T15:24:20","slug":"a-look-at-the-current-mega-high-yield-savings-account-landscape","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=18892","title":{"rendered":"A Look At The Current Mega High-Yield Savings Account Landscape"},"content":{"rendered":"


\n<\/p>\n

\n

Mega high-yield savings accounts are a topic I\u2019ve dealt with in great detail on this blog (a full list of previous posts I\u2019ve written about this topic can be found at the end of this post).<\/p>\n

What counts as a mega high-yield savings account might vary depending on who you ask, but my definition is that a mega high-yield savings account is a savings account that offers 5% or more interest. Generally, these accounts are more restrictive than regular savings accounts, usually requiring some work to set up, as well as limiting the amount of money that you can have earning 5% or more interest.\u00a0<\/p>\n

Over the past few years, these accounts haven\u2019t been very useful since interest rates have been high and it\u2019s been possible to get around 5% interest without going through the hassles of these mega high-yield accounts. Indeed, I ended up moving most of the money I had in my mega high-yield savings accounts to Raisin since it was easier for me to have my emergency fund all in one place (you can read my full review on Raisin here<\/a>).<\/p>\n

That being said, I never closed my mega high-yield savings accounts since I suspected that rates might fall one day and I wanted to maintain access to these 5% interest accounts if rates did drop. To avoid inactivity fees, I\u2019ve continued to automate monthly transfers in and out of the accounts.\u00a0<\/p>\n

And sure enough, over the past few months, we\u2019ve started to see rates drop. While we might never get back to the extremely low-interest rate environment we used to be in, we may be reaching the point where it\u2019s worth considering these mega high-yield savings accounts again,<\/p>\n

It\u2019s been a while since I\u2019ve looked at what\u2019s been going on with these mega high-yield savings accounts, so in this post, I wanted to review the current landscape of these accounts and discuss what my plans with these accounts are going forward.<\/p>\n

The Current Landscape of Mega High-Yield Savings Accounts<\/h2>\n

At the time I write this, I see 8 mega high-yield savings accounts that are still around. These include the five flavors of Netspend accounts, as well as DCU, Service Credit Union, and H-E-B Debit. All of these accounts pay at least 5%, with several paying 6% interest.\u00a0<\/p>\n

Of these accounts, DCU is the easiest one to get started with since it doesn\u2019t require any special setup process and has no fees or minimum balance requirements to worry about. The account offers 6% interest on up to $1,000. There\u2019s also the potential for a small signup bonus if you open an account using a referral link (here\u2019s a post I wrote about how to earn a DCU referral bonus<\/a> if you are interested).<\/p>\n

Service Credit Union is the next easiest mega high-yield savings account, offering 5% interest on their primary savings account. Like DCU, Service Credit Union also doesn\u2019t require any special setup procedure and it has no fees or minimum balance requirements. The big downside with Service Credit Union is that the savings account only pays 5% interest on the first $500 in the account, which limits its usefulness (for a detailed look at Service Credit Union, here\u2019s a post I wrote about Service Credit Union<\/a> several years ago).<\/p>\n

After those two credit union accounts, the remaining accounts are prepaid debit card accounts that offer a savings account with them. These accounts all require some initial setup work to avoid fees and require a bit of understanding as to how they work.<\/p>\n

The first of these accounts is the H-E-B Debit account, which offers 6% interest on up to $2,000. This account is probably the best of this type of account because of the high interest rate and the higher cap on what can earn the 6% interest. You can learn more about how the H-E-B Debit account works in this post I wrote:\u00a0The H-E-B Debit Card 6% Interest Savings Account<\/a>.<\/p>\n

After that, you are looking at the Netspend cards. There are multiple \u201cflavors\u201d of these cards and everyone should be able to open at least four of them, with most people able to open five of them.<\/p>\n

Of the various Netspend cards, the regular Netspend card is the first one most people will start with. This card is interesting because it used to limit users to 5% interest on up to $1,000. However, at some point in the past year, it appears they quietly increased the savings account to 6% interest on the first $2,000.<\/p>\n

The other Netspend cards include the Ace Elite, Western Union, H-E-B Prepaid (not to be confused with the H-E-B Debit discussed above), and Brinks. Each of those Netspend cards gives you a 5% interest savings account on up to $1,000. So with all four of those cards, you\u2019d be able to deposit up to $4,000 earning 5% interest. (Note, these Netspend cards come with a lot of initial setup work, so you\u2019ll want to read my post: Netspend Account: The Ultimate Guide to a 5% Interest Savings Account<\/a>.<\/p>\n

Are They Worth It?<\/h2>\n

If you\u2019re able to max out each of the mega high-yield savings accounts discussed above, you\u2019ll be able to set aside $9,500 earning 5% or more interest. If you\u2019re a two-person household, you can set up accounts for each person in your household, increasing the amount you can save to $19,000. For most people, that\u2019s probably an excellent emergency fund.<\/p>\n

Back when interest rates were at 1% or less, I thought it was a no-brainer for most people to set these accounts up, even with all the hassle that went along with it. A two-person household with $19,000 in regular savings accounts earning 1% interest would earn just $190 per year of interest. In contrast, $19,000 earning around 5% interest came out to $950 in a year \u2013 a sum that seemed significant enough that I thought it was worth doing.\u00a0<\/p>\n

Once interest rates went to 4% or higher, the math changed. At one point, Raisin (which is a high-yield savings account option that I use), had accounts offering over 5%, so it made no sense to deal with the mega high-yield options when you could just get 5% or more from Raisin without any hassle. Rates have been dropping though, with your typical high-yield savings account offering around 4% interest now.<\/p>\n

With a 4% interest rate, you\u2019d earn $760 per year in interest on $19,000, in contrast to the $950 per year you\u2019d get if you maximized for the 5% interest rate options. Personally, I don\u2019t think it\u2019s worth the hassle of opening these accounts if the difference in interest is just $100 or $200 per year.\u00a0Where I\u2019d start to consider these accounts more is if the interest rates start dropping down into the 3% range. At that point, you\u2019re looking at a bigger spread that might justify the initial setup work.<\/p>\n

All of this mainly depends on whether or not you already have these accounts open. If you\u2019ve already set up these accounts, then maintaining them shouldn\u2019t require any work on your end assuming you\u2019ve automated the monthly transfers in and out of the account to avoid inactivity fees.<\/p>\n

One thing to note is that Netspend changed the inactivity time limit, changing it from 90 days to 60 days. So, if you want to avoid inactivity fees, I\u2019d recommend you have your automated transfer into and out of the account going monthly, rather than bi-monthly or quarterly. I now have it set up so my Netspend accounts have $1 going into them at the beginning of each month, then $1 getting pulled out at the end of the month.<\/p>\n

My Plans Going Forward<\/h2>\n

Right now, I\u2019m doing a bit of a hybrid approach, taking advantage of the DCU and H-E-B Debit accounts since they both pay 6% interest, but not doing anything with the 5% accounts. I still keep all of my accounts open because I\u2019ve already automated everything, but if it ever became difficult to avoid fees on the Netspend cards, I\u2019d close them. However, since it\u2019s not hard to keep my accounts open and fee-free, there\u2019s no reason to close them.<\/p>\n

If rates for regular high-yield savings accounts do drop, I may consider maxing out all of these 5% interest accounts, but right now, I\u2019m fine with just using the DCU and H-E-B Debit accounts. I haven\u2019t gotten around to putting money back into my regular Netspend account even though it appears to pay 6% interest now, mainly because I\u2019ve been too lazy to deal with moving the money into it, but also because I\u2019m not quite clear if it\u2019s actually paying 6% interest. I have a sneaking suspicion that the Netspend account I have might still only pay 5% interest and that the 6% interest account is a different product or only for new customers.<\/p>\n

The big question you might have is whether it\u2019s worth dealing with these accounts if you haven\u2019t opened them yet. In my opinion, it\u2019s probably still not worth dealing with these accounts if you haven\u2019t opened them yet \u2013 the difference in interest rates between these accounts and a regular high-yield savings account isn\u2019t worth it.<\/p>\n

That being said, if you\u2019re someone who really likes to optimize things, I\u2019d say it\u2019s probably worth opening a DCU account since that account is easy to open and doesn\u2019t require any management on your end. I wouldn\u2019t deal with the hassle of opening the others though until rates drop significantly. For me, interest rates need to drop to 3% or lower before I\u2019d deal with the hassle of opening up these mega high-yield savings accounts.<\/p>\n

Final Thoughts\u00a0<\/h2>\n

Interest rates being where they are now is nice, as it makes it easier to deal with your cash. Back when rates were at 1% or less, holding cash often didn\u2019t feel great, as even large amounts didn\u2019t feel like much, so these accounts made a lot of sense. Today, these mega high-yield savings accounts aren\u2019t really that important.\u00a0<\/p>\n

I\u2019m still keeping these accounts open unless something changes with the fee structure. But since I\u2019ve automated everything, I don\u2019t even have to look at the accounts.\u00a0<\/p>\n

If you want to learn more about how these accounts work, I\u2019ve got a lot of posts I\u2019ve written about them over the years, so check them out if you\u2019re interested.<\/p>\n

\n

This post may contain affiliate links. Financial Panther has partnered with AwardWallet and CardRatings for our coverage of credit card products. Financial Panther, AwardWallet, and CardRatings may receive a commission from card issuers. Some or all of the card offers that appear on the website are from advertisers. Compensation may impact on how and where card products appear on the site. The site does not include all card companies, or all available card offers. Opinions, reviews, analyses & recommendations are the author\u2019s alone, and have not been reviewed, endorsed or approved by any of these entities.<\/em><\/p>\n

\n

More <\/span>Recommended Ebike\/Scooters<\/h2>\n

Check out these other ebikes and scooters I’ve reviewed:<\/p>\n