Ideal Millenial Entrepreneur Podcast

131: High Yield Savings: Putting Your Lazy Cash to Work

• Amir Estimo • Season 6 • Episode 131

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Your money shouldn't just sit there getting lazy. With traditional banks offering less than 1% interest while inflation eats away at your savings, it's time for a serious financial upgrade.

Welcome to a crucial conversation about making your cash work harder for you. As millennial entrepreneurs, we need smarter approaches to money management beyond the conventional advice. High-yield savings accounts have emerged as powerful tools for growing your money without diving into risky investments, typically offering 3-4% returns compared to the pitiful rates from traditional banks.

The reality is stark: approximately 50% of Americans don't even have $1,000 saved. Escrow accounts hold your money without generating interest. Meanwhile, eggs cost nearly $20 at the grocery store, and inflation continues to erode purchasing power. But strategic solutions exist. By separating your finances into purposeful accounts – short-term for bills and maintenance, long-term for emergencies (3-6 months of expenses), plus dedicated savings for home repairs, vacations, and major expenses – you create a system that works.

I share my personal strategy of moving mortgage-related escrow payments to a high-yield account, allowing that money to generate interest throughout the year before paying property taxes and insurance. This simple shift transforms idle cash into working capital. Companies like SoFi, American Express, Discover, Capital One, and Ally Bank all offer competitive options worth exploring.

Beyond better returns, these online accounts provide an unexpected benefit: since transfers typically take days rather than seconds, they create a natural barrier against impulsive spending – forcing better savings habits in a country that desperately needs them. Ready to transform your financial future? Start by giving your money the job it deserves.

This podcast is sponsored by Starvelle Talent Group. Our goal is to help the culture build Wealth Assets Prosperity. We appreciate you taking the time to listen to this episode and share the content if you find value.

Speaker 1:

Bienvenidos a Ideal Millennial Entrepreneur Podcast the podcast for millennial entrepreneurs, where each week I share financial tips on how to improve your finance, increase your income and your mindset as a millennial entrepreneur. Thanks for joining me in today's episode, empecemos.

Speaker 2:

Welcome to the Ideal Millennial Entrepreneur Podcast, and I am your host, amir Estimo. Today's episode we're going to talk about is your money or is your cash working for you or just sitting around getting lazy? And we're going to talk about low yield savings account. So, basically, we're going to talk about high yield savings account and why your money should not still be sitting in a low yield savings account like a traditional bank, like a Chase Bank of America, wells Fargo, et cetera, and we're going to talk about how to make your money work harder for you without jumping into risky investments. So let's go ahead and jump into the podcast. So when we look at traditional banks again, like I said earlier, chase Bank of America, wells Fargo, all these banks we're seeing that one thing we know is if you put some money into your account, your money does not grow, it remains. You get like maybe less than one percent, depending. And we know what banks do. They take the money. They take your money and they use it. They lend it out to someone at a higher interest rate and that's how they're able to make money. But years ago, high yield savings account online became a thing, and the reason why is because they offer maybe not. You're not going to get 10% interest on your money if you put it on there, but you will get more of a higher interest rate. Traditionally, depending on how the market does, you will get somewhere between, depending, it could flow between 3.25, 4,. I've even seen as high as 4.75%, and usually that tends to be revised again how the market is performing, how. And then you're taking account of inflation too, and what we're seeing now, with inflation being as high as it is now that your money is, you're not seeing your money grow as it used to be, and that's because now, of course, you have inflation and you have all these things, how the market is volatile, so the return on your investment is not high Generally with your money.

Speaker 2:

If you're someone who's into investing, you don't really want your money to sit around into a traditional bank account. Now you can have something called a short-term, basically a short-term savings, and that's if you have, you know, just short-term things that come up. Let's say, if you're a homeowner, you're paying your bills through there, or let's just say that, okay, you need a car, you need maintenance. And then let's say that you have a car, you need maintenance, something around the house breaks, or there can be various things. You use that short-term savings account and you have access to and that's where you could probably leave your money into a Chase, into Bank of America, et cetera. Now, if you want long-term now, the reason you would have something like a long-term savings account is because you want to be able to. Let's say, if you're at work, your job lets you go, you have at least three to six months worth of savings before you really have to go back out and find another job, and your long-term savings account could be depending on what you see fits best for you. And I can give you an example For us and our family, we not only have a short term savings account, we have what we call an emergency fund, which is your long term account, and then we have stuff like a vacation account and we have an account also just for our house.

Speaker 2:

So we don't really co-mingle a lot of that stuff, because if something goes wrong with the house, we just want to be able to go into our house and also in that house account. That's what pays for our things, like our taxes and our insurance. Because earlier this year I ended up taking responsibility based off, and the reason I did this was because I was kind of getting annoyed because I'm Every. You know, when you become a homeowner what happens is is that your mortgage is consist of PITI, which is your principal, your interest, your taxes and your insurance. So the taxes and insurance used to be through escrow. So when I make my mortgage payments I will also make payments. That goes into a escrow account.

Speaker 2:

But I started noticing the last two years, every year my mortgage was going up because the company, the mortgage company was not taking, of course, as much as they should. And I just felt like for one, when you leave that money into an account one, it does not grow with interest because of course it's an escrow account. So I started looking into a high yield savings account and there's quite a few out there there's SoFi, there's American Express has one, discover Bank has one, capital One has, and you can Ali Bank, I think, has another. Like you can literally Google and you can find as many as you want. So I said, okay, you know what, instead of that money just sitting in an escrow account and then, of course, when it's time to pay for your taxes and insurance and it gets dispersed.

Speaker 2:

So what I do is say let me keep that same system. I can probably pay a little bit more, but I'm going to put this money into a high yield savings account. So not only it's only really going to be distributed once a year, because that's when my taxes and insurance comes through, and it's only going to come out once a year. So within that year, if I go, when I go ahead and withdraw the money to pay for my taxes and insurance, it'll be withdrawn with interest and then, of course, the money would grow. So something like a traditional bank where you would get less than 1%. Here you're getting about three to close to 4%, depending on how volatile or how inflation and all that works. So I think that was a better idea for me and my family. Again, still keep that same system.

Speaker 2:

But the difference now is that this money now is going into a high yield savings account where it can now actually earn some interest. High yield savings account where it can now actually earn some interest. And when we look at that, the high yield savings account is becoming, or has become now a lot easier for people, a lot easier for people to use because you're now getting a bigger return on your investment. So again, you know you have quite a few companies that offer this, and then we look into things like money market funds, which I don't really want to dive too much into, but we want to look into that also.

Speaker 2:

So this is a great opportunity for you guys that if you are really looking for other means to be able to grow your money, now of course a bank whether it's high yields or it could be a traditional bank you know your money's not going to grow. You can't expect your money to be rich especially a traditional bank. Your money cannot be rich. Your money won't. You won't be a millionaire overnight with that strategy. But if you are someone that's looking for other means, because now, as we see, inflation is eating up savings account, it's eating up your savings account because things are so costly and, of course, pay is not really going up and you're paying for eggs almost 20 bucks for eggs.

Speaker 2:

I don't know how many skits I've seen on TikTok about that, but I can say this for a fact that look at other ways of switching up, maybe your saving strategy, and if it's something that you're going to leave your money in for long term, look out another means to be able to save to grow your money. So I'll just give you guys another way things to look at. As far as your money and as far as you know, what do you do with it nowadays days, um, how a high savings account can be beneficial. But again, we know how your savings account is a great option If you're just you know you're trying to put your money into a long-term. I mean there's other things you can do. Of course, putting your money in a, putting your money in a, putting your money in a in a permanent life insurance, is a good idea, you know, because that will hedge against inflation. That, of course, you know.

Speaker 2:

If you're you're not, if you're looking to eventually borrow for yourself and go into something like infinite banking, a high deal not a higher but a permanent life insurance is a great option. So again, there's a variety of companies you can look at. There is SoFi, capital, one, discover, american Express, ali you can literally just Google it and you can find high yield savings account and look to see what is the, what is the, what's the interest at the time, and you will see that in this option, that that this is a, is better than traditional bank, especially if you're looking at something more on the long term, long term side, all right. So thank you for today's podcast episode and I just wanted to share that with you guys and hopefully you guys take advantage of it, because I think right now the last time I saw 4.25 was the interest rate, but again, that fluctuates. You know that could be like that for a while and then it can usually go down, but they'll let you know. But it's beats putting your money into a low, 1% traditional bank account.

Speaker 2:

And another thing I like about this, with the high yield savings account too, is, even though you can and then usually they waive you can request a debit card if that's what you want, I do, but they usually waive fees too, as far as ATM fees, because of course, you know they don't really have. The only company I know that really does is, uh, I think it's, um, it's Capital One Bank, but all the other companies really don't have a brick and mortar, uh, where you can go and withdraw money. But what I like about this it's not like it's easy access. Usually it can take days to get your money, and so it really puts you in a position to really force yourself to save, which is what we in America is I struggled with, we struggled with saving. The average American doesn't have.

Speaker 2:

They say that 50% of the population don't even have a thousand dollars in their bank account. So think about that. Please don't be the that 50 percent. That don't be the 50 percent that do. All right, thank you and have a good day. I appreciate you Much. Love, peace.