A high-yield savings account is a type of savings account that offers better-than-average interest rates on deposits. They are also known as high-interest savings accounts. High-yield savings accounts stand out 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. While the national average return on a traditional savings account is just 0.33%, a high-yield savings account applies much higher interest earnings to your savings. In 2023, many of these accounts offer interest rates over 4%. For this reason, people store their cash in a high-yield savings account to reach their goals more quickly — whether its saving up for something in the short term, like a vacation, or planning to make a large expense down the road, such as a down payment on a home.

Some key features of high-yield savings accounts include:

• Higher Interest Rates: High-yield savings accounts pay significantly more than the national average of a standard or traditional savings account. The interest rates on high-yield savings accounts can be 10 to 12 times higher than traditional savings account returns.

• Risk-Free: A high yield savings account allows your money to grow risk-free, making it ideal for storing short-term savings.

• FDIC Insured: High-yield savings accounts are usually Federal Deposit Insurance Corporation (FDIC) insured, provided your bank has FDIC insurance. This means that even if your bank fails, your funds will be protected up to an applicable amount.

A high-yield savings account is 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[[3]](https://www.investopedia.com/articles/pf/09/high-yield-sav...