Here Are 3 Reasons Why Retirees Need to Move Their Cash to a High-Yield Savings Account
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If you're retired or nearing retirement age, chances are you're not on the lookout for high-risk, high-reward investments. You just want an easy way to earn on your cash while keeping it totally safe.
If so, I've got the perfect place for you to keep your loose cash: A high-yield savings account (HYSA).
As the name suggests, high-yield savings accounts offer much higher APYs than traditional savings accounts -- all while keeping your money instantly accessible and totally protected.
Here's how HYSAs work, and why you should open one today.
1. Safety first: Your money's still FDIC-insured
Just like traditional bank accounts, HYSAs are FDIC insured up to $250,000 per depositor, per bank. That means up to $250,000 of your money is protected against bank failure.
If safety's your concern, rest assured -- HYSAs are just as effective as your traditional savings account in this regard.
And since most top HYSAs have no account fees and low account minimums, there's virtually no harm in opening one.
2. Higher returns than traditional accounts
Here's the main draw of HYSAs: Much higher APYs than your dusty, run-of-the-mill savings account.
Right now, the national average savings APY is just 0.40%, according to the Federal Reserve. Meanwhile, some of the best high-yield savings accounts are paying around 4.00% APY -- literally 10x the national average.
That means for every $10,000 in your account, you could be earning $400 a year in interest, compared to the $40 you'd get with the national average. And that's all for taking a few minutes to open an account and move your money.
Ready to supercharge your savings? See our list of the best high-yield savings accounts available today to find the one for you.
3. Keep instant access to your cash
If you think you have to tie up your loose cash to use an HYSA, think again -- just like traditional savings accounts, HYSAs let you move money in and out whenever you want. There are no waiting periods and no early withdrawal fees, making them the perfect place for your emergency fund and short-term savings.
When you're at retirement age or getting close, you don't need a get-rich-quick scheme -- you just need a simple, safe way to earn more on the money you already have. That's where high-yield savings comes in.
If you're looking for an easy way to earn as high as 4.00% APY, I highly recommend you join me in the HYSA revolution.
Want to get started today? Check out our list of the best high-yield savings accounts available now.
Our Research Expert
Ryan Wilcox is a full-time Personal Finance Writer at Motley Fool Money, covering credit cards, bank accounts, investing, auto insurance, and other personal finance topics. Ryan has been writing about credit cards and savings since 2022. Before joining Motley Fool Money, he was a full-time writer at The Points Guy, where he focused on maximizing credit card rewards and travel strategies. He holds a bachelor’s degree in English and American History from the University of North Carolina at Chapel Hill, where he also spent four years reporting for The Daily Tar Heel. With a background in both journalism and consumer finance, he brings a clear and thoughtful voice to money topics. Outside of work, Ryan is likely reading, writing, or updating his Letterboxd account.