The bad news is that interest rates are on the rise. Credit, loans and other types of borrowing have become more expensive as the prime rate increased from 6.75% last October to 8.35% this October. Consumers who are carrying a lot of debt may be feeling the pinch.

On the flip side, the good news is that rising interest rates also mean rising savings rates. High yield savings accounts are now offering annual yield rates as high as 5.25%. Compare that to a standard bank savings account that offers you a meager 0.50% annual percentage yield (APY). That&39;s so low that your savings aren&39;t even keeping up with inflation!

Let&39;s do the math. With a $5,000 balance, you can $275 in compounding interest through a high yield savings account versus $37 in interest with a bank savings account. That&39;s a major difference!

Plus, it&39;s easy to open a high yield savings account online. There are now several different financial institutions to choose from since the market expanded significantly. Here&39;s a breakdown of the different services you can choose between:

• ING Direct - 4.40% APY with no fees, service charges or minimums. Plus, great online security and easy online transactions. I have had a savings account with this company for a few years.
• EmigrantDirect - 5.05% APY with no fees, service charges or minimums. Seems to have a few usability and customer service foibles.
• AmboyDirect - 4.28% APY for balances over $3,000. 1.00% APY for balances above $300. Minimum balance requirement of $100. Limited to three free withdrawals a month. May have some other fees, it&39;s unclear.
• HSBCDirect - 5.05% APY with no minimum balance and no fees. Has some cool offline connections that allow you to deposit and withdraw from HSBC branch ATMs.
• CitibankDirect - 5.00% APY with no minimum balance. There are some fees for opening your account initially and you are required to open a checking account too. Also has offline deposit and withdrawal opportunities.

Do you already have a high yield savings account? Report your experiences and warnings in the comments section below!