**Tech Startup ONE Increases Savings Rate to 5% APY**
Financial technology startup ONE, which is backed by Walmart, has recently raised its rate on savings balances to 5% APY. This rate is more than 12 times the national average savings account rate of 0.4%, according to FDIC data.
**High-Yield Savings Accounts Offered by Tech Companies**
ONE is not the only tech company offering high rates on savings accounts. Apple, in partnership with Goldman Sachs, launched its own high-yield savings account earlier this year, which currently offers a 4.15% APY. Additionally, Step, a platform designed to help teens and young adults become financially independent, now offers 5% APY on savings.
**Comparison to Other High-Yield Savings Accounts**
These rates offered by tech companies rival some of the best high-yield savings accounts on the market. Varo Bank and My Banking Direct, for example, both provide 5% APY on their high-yield savings products. Many other institutions have rates above 4% APY, especially those operating online.
**Lower Rates in Mainstream Banking Institutions**
Mainstream banking institutions have received criticism for keeping their savings account yields low, despite multiple rate hikes by the Federal Reserve. While the Fed has raised rates 10 times since March 22 to a target rate of 5.00% to 5.25%, tech-focused banks and financial platforms have seized the opportunity to attract customers with competitive yields.
**How to Earn 5% APY with a ONE Account**
Users of ONE can qualify for the 5% APY rate on balances up to $100,000 by either setting up direct deposits of at least $500 per month or maintaining a daily balance of at least $5,000. Balances over the $100,000 threshold will earn 1% APY. There are no monthly maintenance fees for this account, and no minimum balance requirements.
**ONE: A Financial Technology Company**
It’s important to note that ONE is a financial technology company, rather than a bank. However, deposits are protected up to $250,000 per depositor by the FDIC through ONE’s banking partner, Coastal Community Bank. Accounts are held with Coastal Community Bank, while ONE services the accounts. Customers should contact ONE Customer Service for any account-related issues.
ONE aims to provide a comprehensive platform for saving, spending, and growing money. ONE accounts are essentially checking accounts that include a “checking” tab and a “savings” tab where funds can be allocated into primary savings and custom savings “pockets.” While these pockets may appear as separate savings accounts, they are technically subsections of one main checking account.
**Considerations and Conclusion**
While the Federal Reserve’s rate hikes primarily impact lending, certain financial institutions and tech companies have shown that it is possible to offer high rates on savings accounts, such as 5% APY or higher, if prioritized. Seeking out high-yield savings accounts is a wise strategy for faster growth of savings. It is important, however, to verify that the bank is FDIC-insured and has a strong reputation before depositing money into a new account.
GIPHY App Key not set. Please check settings