We opened a high-yield savings account right after getting engaged, and it's the smartest thing we've done for our wedding
- My partner and I got engaged in March and immediately opened a high-yield savings account to save for our wedding.
- With a year to go before our wedding, we'd already saved $11,200 (more than our $10,000 goal) and were earning 1.9% interest.
- By the time we get married in June 2020, the interest we've earned on our account will pay for our simple wedding flowers.
- Open a high-yield savings account with Wealthfront or Betterment today to take advantage of great interest rates »
In March, my partner of seven years proposed. The proposal involved waterfalls, champagne, and a gorgeous vintage-inspired ring.
Our love story is only the backdrop for what I'm writing about today, though. Taking center stage is the high-yield savings account we opened right after getting engaged. It's the smartest financial move we made for our wedding.
Why I'm obsessed with our high-yield savings account
We set the wedding date for June 2020. We knew we needed to start saving as soon as possible. It helped that we had an idea of where we wanted to get married and how much it would cost. Once we verified these details, we set our wedding fund goal at $10,000.
My partner and I already knew that our wedding fund would be housed in a high-yield savings account. That's because we already had two of our own with Synchrony bank, "Emergency Savings" and "Future Expenses."
We opened these accounts a few years ago in order to meet our savings goals. Like many people, we used to have a savings account attached to our checking, but the interest you can earn on the savings with our bank was just 0.05%. High-yield savings accounts offer much higher rates. Ally bank, for example, has a 1.7% rate, and Synchrony bank has a rate of 1.9%.
Having our money earn more was a no brainer. I only wish we had opened one sooner.
When our savings were attached to a checking account, it seemed like we never made any progress. We would save, but the easy access to the money was just that - too easy. We both needed a place to save that was accessible in an emergency or for the future, but not something we could see every day. A high-yield savings account in an online bank was the perfect solution.
We quickly built up our savings in the high-yield savings account by setting up automatic transfers. Soon, our emergency fund goals were met and our future-expenses account held the needed money for short-term savings goals.
We're earning money for our wedding without lifting a finger
In every good love story, the main characters find helpful guides and advice along the way. In Disney films, they turn out to be singing birds and crafty mice. In real life, our high-yield savings account played that role - it offered a secure way for us to build our wedding fund.
The best part of the story is that the savings account now pays us each month. Here's how that happened:
- We opened an online high-yield savings account with Synchrony bank.
- The interest rate was 2.0% when we first opened the account but has now dropped to 1.9% because of the Fed's interest rate cut.
- Within the first four months of opening the account, we deposited a total of $11,200.
- Now, each month our savings is earning more than 20 times the interest of a typical bank savings account.
Our account grows without us touching it. That's worth swooning over.
Accessing the wedding money and other considerations for our high-yield savings account
When we're ready to access the funds, we'll transfer the money back to our checking accounts. This typically takes one to two business days. We also have bank cards associated with the high-yield savings account that we can use at an ATM if needed, but we keep those locked away as we prefer to transfer the money.
Synchrony allows six withdrawals or transfers during each billing cycle, which is common for high-yield savings accounts due to certain federal regulations.
There are plenty of high-yield savings accounts out there. Wealthfront, Betterment, and Ally are just a few in competition with Synchrony. Each one offers unique perks.
A high-yield savings account can help you achieve your financial goals. Open an account with Wealthfront or Betterment today »
When we first looked for a savings account, we were focused on the highest interest rate we could find. However, we also compared:
- Minimum balance requirements
- Minimum deposit requirements
- Fees
- Transaction limits
- Deposit options
Lastly, we made sure that the savings account would be FDIC-insured. This just means that if the bank fails, we won't lose all of our savings.
The high-yield savings accounts mentioned in this piece all have FDIC coverage and competitive interest rates. You really can't go wrong with opening a high-yield savings account.
Happy financial endings are my favorite
We met our wedding savings goal early on in July of 2019, with a little less than one year for that money to grow. So far, we have earned $85.70 in interest. By the time our wedding rolls around, we should earn at least another $106 if our rate stays the same. That's enough to pay for our simple flowers.
Our wedding savings account has given us peace of mind. We have the money to pay for our amazing day, and the funds are now working to pay us for the next few months by collecting that interest. It's a fairy tale with a happy financial ending.
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