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With many families feeling the pinch of an inflated market and struggling to retire with financial freedom, more people are looking for ways to make their money go further—faster.
For those seeking a savvy method for earning more cents on each dollar, a high-yield savings account offers an alternative to the low interest rates that traditional banks offer.
High-yield savings accounts, typically offered by online banks and credit unions, provide a significantly higher interest rate than traditional banks. While traditional banks, such as Wells Fargo or Chase, offer interest rates around 0.01% or 0.02% APY, high-yield accounts offer rates upward of 4.00% APY.
While high-yield accounts have their merit, they may not be for everyone. Many banks offering an impressive APY are fully online, meaning there are no brick-and-mortar stores available. This may be worth considering if you prefer a personalized touch to your banking experience.
However, for many, the benefits of a high-yield account outweigh the potential insecurity of online banking.
For those looking to make their money work for them through interest, a high-yield account offers both flexibility and excellent returns without the fees or length required of long-term investments. We believe this makes it a perfect option for sinking funds or emergency funds.
There’s a reason high-yield savings accounts are growing in popularity. With an attractive APY, minimal requirements for opening an account, and an abundance of options available for consumers, there are many reasons to choose a high-yield account for your savings.
While investment options such as ETFs or mutual funds can offer a greater return through the power of compound interest, many of these methods win over the long term. The time required makes those methods ideal for those who don’t intend to withdraw the money for a handful of years, or even until retirement.
Alternatively, high-yield savings accounts are liquid, meaning you can withdraw your money as you desire without incurring penalties. Of course, the greater your savings balance is, the greater your interest return will be.
CDs or Certificates of Deposits are another conservative approach to earning higher interest than traditional savings accounts. Unlike high-yield accounts, funds deposited into a CD cannot be touched for a specified time without a penalty. The APY for CDs often varies by bank/credit union, amount of funds deposited, and the chosen length of time for it to mature.
High-yield saving accounts are just one tool to leverage in creating a powerful retirement strategy. To learn more about preparing for your financial future, connect with Savvly, the first market-driven pension designed to meet your long-term income needs at a fraction of the cost of an annuity.
Assumptions and Risk Disclosure
The information on this page is provided for educational purposes only and is not intended as investment, legal, or tax advice. It is designed solely to illustrate how longevity-based investment benefits may work under certain assumptions. Actual results will vary.
All illustrations, examples, and case studies are hypothetical and are intended to demonstrate potential scenarios—not to predict or guarantee actual outcomes. They do not represent the performance of any individual investor, portfolio, or account.
Key Assumptions Used in the Illustrations
- Life expectancy and mortality projections are based on the most recent Social Security Administration (SSA) tables available at the time of simulation.
- In the event of death or early withdrawal, hypothetical scenarios assume that beneficiaries may receive 75% of the lesser of the initial investment or current market value, plus 1% for each full year the account was active.
- Case studies assume standardized market growth of 8% annually and do not incorporate unexpected market volatility, inflation, changes in interest rates, or changes in an investor’s personal circumstances.
- Simulations may assume a 3% annual early withdrawal rate prior to payout or death.
- All figures shown are net of fees.
Risks to Consider
- Market Risk: Investment values will fluctuate and may be worth more or less than the amount invested. There are no guaranteed returns.
- Sequence of Returns Risk: The order and timing of market gains or losses—particularly near the payout phase—can materially affect results.
- Longevity Risk: Living longer than projected may reduce the pooled benefit per participant; shorter-than-expected lifespans may affect the amount received.
- Redemption Impact: Early or voluntary withdrawals by other participants can impact overall fund performance and distribution outcomes.
No forecast, projection, or hypothetical return should be relied upon as a promise or representation of future performance. Investors should carefully evaluate their own circumstances and consult a qualified financial professional before making any investment decision.
