What Fees Are Common With HYSAs, CDs, and MMAs?

While traditional checking and savings accounts come with their own set of fees, high-yield savings accounts (HYSAs), certificates of deposit (CDs), and money market accounts (MMAs) have different fee structures. Understanding these fees can help you make informed decisions about where to place your money.

High-Yield Savings Account Fees

High-yield savings accounts offer attractive interest rates but may come with the following fees:

• Overdraft fees: If your balance dips below zero, you might be charged an overdraft fee, which can be as high as $30 per transaction.
• Minimum balance fees: Some HYSAs require a minimum balance, and failing to maintain it can result in fees or a reduced interest rate.
• Maintenance fees: While not common, some HYSAs charge monthly maintenance fees ranging from a few dollars to $25 per month. Inactivity fees may also apply if there is no account activity for six months.

Money Market Account Fees

Money market accounts often offer competitive interest rates but may include the following fees:

• Minimum balance fee or rate decrease: Failing to maintain a required minimum balance can result in fees or a lower interest rate.
• Maintenance fee: Some MMAs charge monthly maintenance fees, which may be waived if you meet a minimum balance.
• Excessive withdrawals: Some MMAs limit withdrawals to six per month, and exceeding this limit can result in fees of around $10 to $15 per transaction.
• Overdraft fees: Similar to HYSAs, overdraft fees apply if you withdraw more than your account balance.

CD Fees

Certificates of deposit (CDs) are known for their higher interest rates but come with early withdrawal penalties:

• Early withdrawal penalty: Withdrawing money before the maturity date can result in penalties, often expressed as a number of months’ worth of interest earnings.

How Can You Avoid Fees for High-Yield Banking?

Many of these fees are avoidable if you take the following steps:

• Open the right account type: Choose an account that aligns with your financial situation and goals. For example, if you can’t predict when you’ll need access to your funds, a CD might not be the best choice.
• Comparison shop: Compare rates, terms, and fees across different financial institutions. Online-only banks and credit unions often have fewer fees and higher APYs.
• Read the fine print: Understand the terms and conditions before opening an account to avoid unexpected fees.
• Consider trade-offs beyond fees: Weigh the benefits and drawbacks of different account types. For example, a no-penalty CD may offer lower yields but more flexibility.

Which Type of Account Is Right for You?

When choosing between HYSAs, CDs, and MMAs, consider the following factors:

• How much can you put aside immediately? Some accounts require minimum opening deposits and ongoing balances.
• How much liquidity do you need? CDs have the least liquidity, while MMAs offer the most. HYSAs fall somewhere in between.
• How important is interest? CDs typically offer higher interest rates but come with more restrictions. HYSAs and MMAs offer competitive rates with more flexibility.

The Bottom Line

High-yield savings accounts, CDs, and MMAs can be highly beneficial, especially when interest rates are favorable. Your earnings will go further if you choose an account that matches your needs and goals and if you are aware of the fees and know how to avoid them.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. Our team of experts is here to help you navigate your financial journey with ease and confidence.