How to Find a High Yield Savings Account
© - 2006 SavingsAccounts.Factslink.com

Defined Tag: High Yield Savings Account.
Whether you're the money manager for a business or simply watching over your own assets, you know how important it is to balance liquidity with yields. For instance, you might know that a certain project has a high probability of yielding a 6% return; however, if you invest in that project, you will lose all of your liquidity. In contrast, if you put your money in a high yield savings account, you might be able to earn a 5% interest rate while maintaining complete liquidity.

With that being said, if you can maintain a constant amount of liquidity with any savings account, then you should look for a high yield savings account. When doing this, there are two things to consider: what are domestic interest rates versus international interest rates? And what is the domestic inflation rate versus international inflation rates?

The first question is rather easily answered. Simply search for rates for different high yield savings accounts over the Internet. A good way to start is to look at central bank rates in each country. This is usually a good indicator of the interest rates in a given country. For instance, if central bank interest rates in the US are high and central bank interest rates in Japan are low (and they actually are right now), then you can probably find the best high yield savings account in the United States, rather than in Japan.

However, this is based on one crucial assumption: that inflation rates are constant, which they aren't. If there's more inflation in the US and Japan, but interest rates are equal, you will want to save in Japan, rather than the US. Saving money in yen, rather than dollars, will actually boost the return on your high yield savings account, assuming all other things are held constant.

© - 2006 SavingsAccounts.Factslink.com