Definition

A high-yield savings account works like an ordinary savings account but pays a far higher interest rate, usually offered by online banks with lower overhead. It is the standard home for an emergency fund: the money stays liquid and FDIC-insured while earning a competitive return. Rates move up and down with broader interest rates.

1. Emergency Fund: How Much You Need and Where to Keep It

   An emergency fund is the single most important financial buffer you can build. Here is exactly how much to save, where to keep it, and how to build it faster than you think.
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1. Liquidity

   How quickly an asset can be turned into cash without losing value.
2. Annual Percentage Yield (APY)

   The real yearly return on savings, including the effect of compounding.
3. FDIC Insurance

   U.S. government protection for bank deposits, up to $250,000 per depositor, per bank.