High-Yield Savings Account

A high-yield savings account pays several times the rate of a standard bank savings account while keeping money instantly accessible and insured. The gap is not small: 4% versus 0.4% on a $20,000 emergency fund is $720 a year for one transfer. Online banks can offer it because they have no branch network. The catch to watch is the teaser rate that quietly drops after six months, so check the rate twice a year and treat it as a switchable commodity, not a relationship.