The pros and cons of a high-yield savings account

They can pay up to 10 times more than a standard savings account

High yield, low risk road sign
These savings accounts are typically only offered by online banks and credit unions
(Image credit: James Brey / Getty Images)

A high-yield savings account delivers exactly what its name suggests: higher yields on your deposits. Indeed, high-yield savings accounts "can pay up to 10 to 12 times the national average of a standard savings account," said Investopedia.

This category of savings accounts are typically offered by online banks and credit unions, as opposed to traditional brick-and-mortar banks. This is often possible to do because these online institutions have fewer overhead costs. But otherwise, high-yield savings accounts tend to work in much the same way a savings account usually does — you deposit money, and in exchange, the bank pays you interest.

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Becca Stanek, The Week US

Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She previously served as a deputy editor and later a managing editor overseeing investing and savings content at LendingTree and as an editor at the financial startup SmartAsset, where she focused on retirement- and financial-adviser-related content. Before that, Becca was a staff writer at The Week, primarily contributing to Speed Reads.