This content is sponsored by PenFed Credit Union, federally insured by NCUA.
Planning your dream summer vacation can be exciting, but in today’s time, it can also pose financial challenges. As you start planning next year’s getaway, you may want to consider opening a high-yield savings account to maximize your dollar.
Savings accounts allow you to set aside money you plan to use less often. Typically, you’ll make regular deposits into these accounts, allowing them to grow over time. However, unlike traditional savings accounts, a high-yield savings count allows you to earn more interest on your savings, according to The Balance Money.
“A high-yield savings account is a great place for vacation savings because it pays a higher yield than a standard savings account. But it doesn’t come with the long-term commitment of a certificate of deposit,” The Balance Money said.
The potential savings value of these accounts can significantly impact your savings goals for your upcoming summer vacation. Another benefit of high-yield savings accounts is that they are generally easy to open and use with modern technology making it a seamless process.
PenFed Credit Union’s Premium Online Savings Account is a high-yield savings option that can help you keep up with the current inflation rate. You can earn a 3.00% APY and receive over seven times the national average on your savings.1 You’ll start earning dividends on the business day you initiate your deposit, which are credited to your account monthly.
Opening this particular account with PenFed Credit Union offers additional benefits. There is no monthly maintenance fee associated with this account, allowing you to put more money back into our pocket. You can also set up recurring transfers from your account without paying transfer fees.
“With a high-yield savings account, you may potentially earn interest or dividends at a rate that’s 10-25 times higher than that of a traditional savings account thanks to a bigger initial deposit,” PenFed Credit Union’s experts said.
Opening a high-yield savings account for vacations may be a good choice for you if you want to have funds solely dedicated to your getaway.
“Keeping your vacation savings in a separate account allows you to easily assess how much money you actually have to spend on your vacation,” Kendall Philbrick— of Babe on a Budget told The Balance Money. “[By] keeping that money out of sight and out of mind, you’ll be less tempted to spend it on other things and more likely to actually reach your vacation savings goals.”
Some people can rely on credit cards for vacation, but an exclusive vacation account can help you avoid going into debt. However, if you do want to use a credit card, you can put your vacation on a PenFed Platinum Rewards Visa Signature® Card to earn points, and use the money in your savings to pay off the balance.
Saving in advance can also help you maximize the value of your money by allowing you to take advantage of early booking discounts, promotions and better travel deals.
Additionally, you can take advantage of compound interest to boost your savings by consistently depositing funds into a high-yield savings account. This compounding effect can greatly accelerate your progress towards your summer vacation goals.
The inflation rate coupled with high interest rates makes this a great time to open a high-yield savings account, according to experts.
“Over time, cash will always lose to inflation. Managing those losses so it doesn’t destroy your ability to achieve your financial goals is necessary,” Jason Preti, CFP, wealth advisor with Unleashed Financial told CBS News.
Unlike some investments, liquidity is not a common issue with high-yield savings accounts. These accounts often provide flexibility and easy access to your funds making it a good option for spending on travel.
“They are still a liquid investment, so they can be accessed at any time, although you’ll be limited to a certain number of withdrawals in a given period.
In addition to offering liquidity, they also are low to no-risk investments and are often FDIC-insured.” Mark Stewart—in-house CPA for Step By Step told CBS News.
Opening a high-yield savings account for your next vacation may be a good choice for you if you’re looking to earn interest on your money in the next several months up to three years. In addition to higher returns, this method of investment is typically easy to get started.
If you want to get a head start on future vacations and watch your money grow, this account could be the answer.
Read more about a premium online savings account on PenFed Credit Union’s website. PenFed Credit Union is federally insured by NCUA.
- APY (Annual Percentage Yield) 3.00% is accurate as of June 1, 2023, and is subject to change at any time. Fees may reduce earnings. $5 minimum to open the account. Premium Online Savings account holders must agree to electronic delivery of account opening disclosures and monthly statements. Sourced directly from fdic.gov/resources/bankers/national-rates as of July 17, 2023
