Investing smartly to yield high returns is always rewarding. Typically, banks reserve their most lucrative rates for certificates of deposit (CDs), incentivizing customers to keep their funds untouched for a specific duration.

However, the UFB Direct Secure Savings Account currently boasts an impressive 5.25% APY. This exceptionally high-interest rate not only positions it among the top-tier savings accounts but also competes favorably with returns offered by many one-year CDs.

Overview

UFB Direct Secure Savings Account

• Our Rating: 5/5 stars

• APY: 5.25%

• Initial Deposit Required: None

• Sign-up Bonus: None

Insight: The UFB Direct Secure Savings Account stands out with its remarkable interest rate, offering up to 5.25% APY, one of the highest in the realm of high-yield savings accounts. Additionally, it imposes no monthly fees and requires no minimum balance to open.

Overview: With an impressive interest rate and no monthly fees or minimum opening deposit, UFB Direct’s Secure Savings Account presents an enticing option.

Benefits:

• Competitive interest rate

• Absence of maintenance fees or minimum monthly balances

• Complimentary ATM card

• Accessible through mobile app and SMS banking

Drawbacks:

• No signup bonus

• Lack of associated checking account

UFB Savings Overview

UFB Direct operates exclusively online as a segment of Axos Bank. One of its flagship offerings is the UFB Direct Secure Savings Account, known for its competitive yield. Presently, this account accrues an attractive 5.25% Annual Percentage Yield (APY) across all account balances.

Curious about potential earnings? Imagine you deposit $10,000 into this high-yield savings vehicle and make no further additions. After one year, you could anticipate earning approximately $525 in interest alone. Notably, this account imposes no minimum opening deposit requirements, ongoing deposit obligations, or monthly service charges. Moreover, account holders receive a complimentary ATM card and enjoy access to a vast network of over 91,000 surcharge-free ATMs nationwide.

Accessible via web or a highly-rated mobile application, UFB Direct’s digital banking platform enables customers to manage their accounts conveniently. Through this platform, users can monitor balances, execute fund transfers, deposit checks remotely, and perform various other banking tasks.

For those already affiliated with Axos Bank, it’s pertinent to note that UFB Direct accounts are FDIC insured up to a total of $250,000 per depositor. This coverage extends across all accounts held within Axos Bank or its affiliated divisions.

One-Year CDs

A certificate of deposit, commonly known as a CD, is a financial instrument that allows you to deposit your funds for a predetermined period, typically ranging from a few months to several years. In exchange for committing your money for the agreed-upon duration, financial institutions offer you a guaranteed fixed interest rate. The longer the term you choose, the higher the interest rate you can typically secure, but your funds remain locked in the account until the maturity date.

One-year CDs, as the name suggests, require a one-year commitment from the investor. These short-term investment vehicles often provide competitive interest rates, making them an attractive option for those seeking to maximize their savings while maintaining liquidity after a relatively brief period.

UFB Savings vs. One-Year CDs

Rarely does one come across a high-interest savings option that doesn’t demand monthly prerequisites like a minimum balance or a specified number of deposits. While there are several one-year term deposits offering comparable rates, accessing them often entails keeping funds inaccessible for the entire term to avoid penalties.

For a comparison, here are some notable one-year term deposit options currently available:

• Discover Certificates of Deposit: 4.70% APY for 1-year term

• Synchrony Bank Certificates of Deposit: 4.80% APY for 1-year term

• Capital One 360 Certificates of Deposit: 4.80% APY for 1-year term

Determining the Superior Choice: Opting for a High-Yield Savings Account or a CD

Comparing the benefits of a high-yield savings account and a CD prompts a consideration of various factors. While some top-notch one-year CDs offer Annual Percentage Yields (APYs) akin to UFB’s high-yield savings account, the latter offers a notable advantage: there’s no requirement to commit your funds for a full 12 months to access such a lucrative APY with UFB. Additionally, in a scenario where interest rates are on the rise, UFB’s account provides the flexibility to earn a higher interest rate, whereas a one-year CD is bound by the prevailing rate. However, it’s essential to acknowledge the potential risk associated with UFB’s account, where the interest rate could theoretically decrease, contrasting with the fixed rate guaranteed by a one-year CD for the ensuing year.

For those unwilling to commit their funds for an entire year, the UFB Direct Secure Savings Account emerges as a compelling choice. Nevertheless, determining the optimal option typically hinges on individual financial objectives and circumstances.

A high-yield savings account proves advantageous if you:

• Require access to funds within the upcoming year

• Aim to establish an emergency fund or another savings reserve

• Wish to avoid penalties associated with withdrawing funds

• Intend to augment your balance with additional funds

Conversely, a one-year CD might be preferable if you:

• Seek assured returns on your investment

• Possess funds that won’t be needed for the next year

• Aspire to benefit from higher interest rates