The Benefits of a High-Interest Savings Account

Written by Mike

Topics: Banking, Investing

After the financial crisis of 2008 and the following years, many investors are a little bit weary of the investment markets. Choosing where to stash any extra money that you may have is definitely challenging. 

Between the stock market, the bond market, and mutual funds, it may not be crystal clear where the best place to put your money is. If you’re having a hard time figuring out where to put your money, a high-interest savings account may be the way to go. Why would you want to put your money into that type of account? Here are a few factors to consider.

Simplicity

One of the big advantages of stashing your nest egg in a high-interest saving account is that it is simple. You don’t have to worry about choosing investment securities or maturation dates or anything like that. You put your money into the account, it earns a specific amount of interest, and you can take it out whenever you want. It’s really that simple. For people who are tired of researching endless numbers of investments, this is the way to go.

Strong Returns

Walter Wisniewski Paragon Capital recommends high-interest savings accounts to many of his clients because of the strong returns that can be earned. These returns are often better than what investors could get from certificates of deposit or regular savings accounts. These accounts typically have very high rates compared to a regular account or a checking account, which puts more money in your pocket.

Safe Investment

One of the best things about a high-interest savings account is that it is generally considered to be a very safe investment. Instead of having to worry about whether you are going to lose your shirt on a high-yield account, you know that the money is going to be there. Even if the bank collapses, the Federal Deposit Insurance Corporation (or the FDIC) will be there to back up the amount of money that you lost. They provide insurance of up to $250,000 of protection per depositor. This means that if you have a joint savings account, up to $500,000 will be protected.

Overall, the high-interest savings account is definitely something that most investors need to take a look at. This is especially true if you have a large sum of money that you can use to start earning interest on right away. You’ll take the guesswork out of investing and earn returns at the same time.

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