Are You Putting Too Much Money in Your High-Yield Savings Account?

Are high-yield savings accounts the best way to increase your wealth? Banks like Varo and Bask are offering returns up to 5%, however it might be worth taking a closer look. With an APY of a dismal 0.43%, current as of this writing, up to 4.25%, many customers are relying on high-yield accounts. Although they may appear attractive on the surface – as the Fed start to which detailed changes ahead, these APYs may also start to fluctuate.

So, is investing in a high-yield savings account really the way to grow long-term prosperity? Many experts contend this is not the case. Potential returns from mutual funds, ETFs and stocks offer more stability for longer periods of time. As the S&P 500 has demonstrated a 12% average annual return previous 10 years, this should be evidently looked into. But, given the risk and volatile involved, individuals should always adopt caution and look at risks.

Nevertheless, high-yield savings account could still face a role for those of us requiring an emergency fund to dip into. At such times, would it be beneficial to desist from higher yields to ensure access? In the words of Adam Stockton of Curinos, “It’s easy to get caught up on earning high interest on everything,” which is why a goal oriented balance should be habitually observed.

Robert Wilson author
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