A high-yield savings account is a type of savings account that offers better-than-average interest rates on deposits. They are different from traditional savings accounts in that they reward you with a higher interest rate, allowing your money to grow even faster as it sits in your account. High-yield savings accounts pay significantly more than the national average of a standard or traditional savings account, with interest rates over 4% in 2023. They are ideal for storing short-term savings, such as an emergency fund or saving up for a vacation, as they allow your money to grow risk-free. High-yield savings accounts are also FDIC-insured, which means that even if your bank fails, your funds will be protected up to an applicable amount.

Some benefits of high-yield savings accounts include:

• Higher interest rates: High-yield savings accounts typically pay a much higher APY than traditional savings accounts, providing savers the ability to earn more on their money while still enjoying the security of a federally insured account.
• Flexibility: High-yield savings accounts have no maturity dates that you must wait for in order to withdraw money without penalty, making them a great choice for short- or medium-term savings goals such as funding a dream vacation, making a down payment on a house, or maintaining an emergency fund.
• Easy withdrawals: Unlike CDs, savings accounts have no maturity dates that you must wait for in order to withdraw money without penalty.

High-yield savings accounts are a great option if you want to grow your savings while avoiding the risks associated with investing in the stock market. They are also a good choice for achieving short-term savings goals.