High-yield savings accounts can be a useful tool for reaching your savings goals.
Why it matters: Many myths surround high-yield savings accounts that can prevent people from taking advantage of their benefits. Below we look at four common myths about high-yield savings accounts and provide tips for avoiding them.
Myth #1: High-yield savings accounts are only for wealthy people.
Many people falsely believe that high-yield savings accounts are only for wealthy individuals. Anyone can open a high-yield savings account. In fact, the minimum deposit to open an account is often low. A number of financial services companies offer high-yield savings accounts with no minimum deposit requirement.
Tip: Look for financial services companies that offer high-yield savings accounts with low or no minimum deposit requirements.
Myth #2: High-yield savings accounts are too complicated to use.
Some people avoid high-yield savings accounts because they think they are too complicated to use. The opposite is often true. A number of financial services companies allow you to open an account online or through an app. You can easily make transfers and deposits with these services.
Myth #3: High-yield savings accounts are not safe.
High-yield savings accounts are not subject to market risks. Unlike stocks, bonds, and other investments, high-yield savings accounts do not fluctuate based on market conditions. The interest rate on your savings account is fixed, so you don't have to worry about losing your principal investment due to market volatility.
Tip: While trends over the last few decades have been to search for high yields through stocks and investments, consider a high-yield savings account to maximize your wealth — without fear of losing your initial investment.
Myth #4: High-yield savings accounts have hidden fees.
Some people believe that high-yield savings accounts have hidden fees that can eat into their savings. While it's true that some banks may charge fees for certain services or transactions, most high-yield savings accounts have few or no fees. Online financial services companies are known for offering fee-free accounts.Tip: Look for high-yield savings accounts with low or no fees to maximize your savings.