High-Interest Savings Accounts: Understanding the Risks & Security
High-interest savings accounts are offered by many different financial institutions today. These types of accounts are very enticing, but many people wonder if they are actually safe. Here are a few things to consider about how risky high-interest savings accounts really are.
FDIC-Insured
If you are dealing with an actual savings account from a bank, then there is not much risk associated with your account. As long as you have an account with a traditional bank, your money is going to be FDIC-insured. This means that if the bank were to go bankrupt, the federal government would step in and repay you for the money that you had deposited up to $100,000 per account.
Money Market Accounts
Some accounts that are billed as high-interest savings accounts are actually money market accounts provided by financial brokerages. These accounts are relatively safe, but they are a little bit riskier than a traditional savings account. These accounts are able to pay a little bit more in interest. However, they are not FDIC-insured, which makes them susceptible to default risk if the brokerage goes under. The likelihood of this happening is low, but there is always the possibility.
-
Maximize Savings: 3 Reasons to Choose a High-Yield Savings Account
High yield savings accounts generate more interest and saving levels. (iStock) High-yield savings accounts are a good option for consumers who want to grow their money by boosting their saving rates.
-
Understanding Low Savings Account Interest Rates: Reasons & What to Expect
You may have noticed that the money you’ve set aside in a savings account isn’t earning much interest. Banks often pay low interest rates on savings accounts. In February 2020, the
Savings
- High-Yield Savings Accounts vs. Traditional: Which is Best for You?
- Checking vs. Savings Accounts: Which is Right for You?
- Comparing Savings Accounts: A Comprehensive Guide
- Wedding Savings Strategies: A Real-Life Story
- Optimizing Your Savings: How Many Accounts Do You Need?
- Top High-Interest Savings Accounts in Canada - 2024
- High-Yield Savings Accounts: A Comprehensive Guide to Choosing the Best One
- Savings Account Security: How Safe Is Your Money?
- High-Yield Checking Accounts: Earn More Interest on Your Balance
-
Emergency Fund Options: CDs, MMAs, and Savings Accounts ComparedIf there’s one thing financial experts agree on, it’s the necessity of having savings on hand in the case of an emergency. Yet, as of 2021, 32% of Americans said that they would not be able to pay for...
-
Checking vs. Savings Accounts: Understanding the Key Differences
If you arent exactly sure what the difference is between a checking account and a savings account, we cant blame you. What does checking even refer to at a time when most of your purchases are happeni...