Before agreeing to any type of financial arrangement, people need to take the time to review all the paperwork regarding the terms of their arrangement. High interest savings accounts are all a bit different from each other with different promotional incentives to open them, interest compound rules, fixed or variable yield rate and so on.
If you agree to deposit your money into a high interest savings account with a “variable interest rate” then, as you might expect, the account rates will be subject to fluctuation. A variable interest rate is when the yield changes periodically. Depending on the account the change can be daily, weekly, monthly or annually. All those points should be addressed in the fine print of the terms of the savings account.
Another factor that changes high interest savings account rate is a promotional offer. Banks fiercely compete for new customers. Some of the strategies they use to secure new business are matching dollar contributions to an account as well as higher than average interest rates being offered to new customers. It is important to realize that there is typically an expiration for any type of bank promotional offer and your high interest savings account rate may fluctuate to accommodate the adjustment specified in your original agreement.
Sometimes the fluctuation of high interest savings account rates is in a positive direction. When the economy is bad, the interest rates are typically low to increase spending and borrowing by consumers and business. When the economy is faring well, interest rates tend to rise. Just because you choose to save your money in a variable rate interest account, does not mean it is a bad move. Interest rates are eventually going to go up again, and you will benefit from a positive fluctuation to your high interest savings account rate.