High-yield savings accounts offer a safe and accessible way to grow your savings, often providing significantly higher interest rates than traditional savings accounts. While the principal is usually secure—thanks to FDIC insurance—certain scenarios can erode your earnings:
- Fees: Maintenance, transaction, or minimum balance fees can reduce your overall balance.
- Inflation: If inflation outpaces the account’s interest rate, your savings’ purchasing power decreases.
- Variable Rates: Interest rates may drop over time, reducing your earnings.
- Opportunity Costs: Storing money in these accounts might limit higher returns possible through other investments.
Despite these risks, high-yield savings accounts remain a reliable choice for many savers when used wisely.
For more details, read the full article on Fox Business.
