As for saving money for retirement, the stock market is not a secure place to build the nest egg. Given the uncertainties of the global economy, money-wise consumers prefer the high interest savings account. Unlike the tax penalties and restrictions associated with making premature withdrawals from CDs (certificates of deposits), the high interest saving accounts doubles as nest egg – emergency fund.  

Amid financial analysts, there is a modicum of contention regarding the big bank versus small and online financial institutions. Individuals familiar with the situation assert that — any savings account under $250,000 is safe at any financial institution long as the FDIC backs it. Others contend that there’s a disparity between the high interest rates saving account from the small banks and large ones.

Many experts argue that the behemoth banks pay lower yields on high interest savings account. For example according to data provided by the FDIC, during the fourth quarter of 2009, institutions wither $100 billion or more of assets paid only .77 percent in annual interest on deposits. In comparison, smaller institutions shelled out an average of 1.73 percent. The 1 percent disparity suggests that larger banks are more apt to reap the financial benefits of being backed by the government.

On the other side of the coin, colossal financial institutions attribute the high interest savings discrepancy on the fact that they have other costs factored into the yield. Dissimilar to the small bank, where ATMs and brands are few and far between, large banks indicate that consumers are paying for the convenience of being able to access funds anywhere.

So when it comes to selecting a bank to open up a high interest saving accounts determine which is more important for your financial situation, an account where you can access the savings account anywhere, or the high interest savings account that yields higher returns.

Have a question about high interest savings account? Please post your questions below.