1. High-yield savings accounts
Overview: A high-yield online savings account pays you interest on your cash balance. And just like a savings account earning pennies at your brick-and-mortar bank, high-yield online savings accounts are accessible vehicles for your cash.
Who are they good for? A savings account is a good vehicle for those who need to access cash in the near future. A high-yield savings account also works well for risk-averse investors who want to avoid the risk that they won’t get their money back.
Risks: The banks that offer these accounts are FDIC-insured, so you don’t have to worry about losing your deposit.
While high-yield savings accounts are considered safe investments, like CDs, you do run the risk of losing purchasing power over time due to inflation, if rates are too low.
Rewards: With fewer overhead costs, you can typically earn much higher interest rates at online banks.
Plus, you can typically access the money by quickly transferring it to your primary bank or maybe even via an ATM.
Where to get them: You can browse Bankrate’s list of best high-yield savings accounts for a top rate. Otherwise, banks and credit unions offer a savings account, though you may not get the best rate.