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High-yield savings accounts can pay far more than traditional savings
The article notes that some traditional savings accounts pay around 0.01% APY, while high-yield savings accounts can offer upwards of 4% APY.
Yahoo Finance argues that keeping large amounts of physical cash is riskier than using interest-earning accounts, since cash under a mattress offers no interest and can be lost, damaged, or stolen.
It says checking accounts are mainly built for frequent transactions and often pay little or no interest, which makes them less suitable as a stand-alone place to save.
For savings accounts, the outlet points to a tradeoff: traditional savings may be insured but can offer very low variable rates, citing roughly 0.01% APY at some large banks.
Yahoo Finance adds that high-yield savings accounts can pay competitive interest, with examples of rates “upwards of 4% APY,” and that online-only models are common to support those returns.