benefits of a high yield savings account? what is the catch? seems to good to be true

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I like Marcus

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Benefits are a decent interest rate when interest rates are high. Catch can be that when interest rates are low there are probably better places for your money. Nothing to worry about besides that if it’s a reputable bank.

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Was going to say the same as A1. Also, benefit is it’s more liquid than having your money in stock or a CD. some allow for up to 6 withdrawals a month. If you have something you’re saving for in the near future (1-2 years) they are better than having your money sit in your checking account or basic savings account.

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I think the Fed lifted the 6 withdrawals/month limit in 2020 too. Not sure if banks have implemented that but I would assume so

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Pros are it’s a safe way to store liquid cash (and even earn small returns on it). Cons are the returns are low and inflation will eat away at it.
I use my HYSA for my emergency fund and to save for a down payment. Currently have 3.3% APY with Ally Bank.

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I use ally bank! It’s not “too good to be true” if you think about it. The reason high yield savings accounts exist is because banks take the money you put in those accounts and use it to lend to other people, and they have incentive to have more of your $ in their care so they have more $ to give out in loans. The more money they can give out in loans, at a higher interest rate than they return to you, the more money they get back. That’s why they incentivize people to put more in and are comfortable with giving account owners returns. As long as they’re FDIC ur fine. My rate with ally is like 3.8% or something insane rn

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Echoing what others have said. My recommendation is to stick to a reputable bank and just double check it’s FDIC insured.

Citibank Accelerate Savings has the best rates and good customer service IMO. I've had a good experience

Thoughts on Sofi?

Wow you got enough $ for a savings account?

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