- To qualify as a long-term high interest savings account, the account must be subject to two things: a 12 to 36 month term agreement and an interest rate above 3%.
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Long-term high interest savings accounts are subject to minimum account balance restrictions and fees. A fee schedule is implemented to impose penalties for accounts that fall below the required minimum balance. These fees will vary by institution.
Long-term high interest savings accounts generally require a $1000 to $50,000 account balance. Additional deposits can be made, however the account must maintain the minimum balance throughout the life of the account. - Long-term high interest savings accounts can carry a high interest rate of 5.50 to 6.00 percent. However, most high interest savings account level at around 4.0 to 4.30 percent.
- A long term high interest savings account can be a traditional savings account with the added benefit of a higher interest rate. However, these savings accounts may require a minimum opening balance of $20,000 or more. To secure a high interest rate for a savings account, opt for a certificate of deposite. These accounts, also a type of savings account, usually only require a $1000 dollar opening balance (with a minimum balance restriction penalty applied to any account that falls below the opening balance amount).
- The financial institution where the certificate of deposit or the high interest savings account is held can apply fees if the account falls even one penny below the minimum balance required. In other words, if an account is restricted to a $1000 dollar balance, that account would be subject to fees if the balance were to drop to $999.99. Most institutions rigidly impose these fees regardless of the amount by which the account falls below the minimum balance. Some banks even impose fees for withdrawing funds from these accounts. Certificates of deposits incur a fee when money is withdrawn from the account as these accounts are subject to term agreements that do not allow such withdrawals.
- All national financial institutions, from Huntington National Bank to Bank of America and Chase National Bank offer long term high interest savings accounts. Each institution will determine the rate schedule and level of return that can be earned with each account. Applicants will need to provide a Social Security number, address, valid driver's license and telephone number. Applicants with a history of check fraud or delinquent activity may not qualify.
- High interest savings accounts and certificates of deposit are insured by the Federal Deposit Insurance Corporation (FDIC), an independent US government agency. All FDIC deposit insurance is protected and is subject to repayment by the United States government. Since its inception, all depositors have recuperated FDIC-insured funds in the event of a loss due to a bank closure, for example.
