The issue for savers with sizable cash balances -- including many retirees -- is that federal deposit insurance typically covers only $250,000 for each account type that you hold at a single bank. So keeping all of your cash in the highest-yielding account you can find may not be an option.
There are ways to earn decent yields while maintaining full insurance coverage, including titling accounts in different ways at a single bank, opening accounts at multiple banks, and taking advantage of online services that will spread your money among several banks while optimizing your yield. For someone with a substantial cash hoard, "a difference of a quarter percentage point makes a big difference in interest income and could well justify doing a little additional legwork," McBride says.
Despite the low rates of recent years, wealthy savers clearly don't see cash as trash. In 2017, the average high net worth individual stashed about 21% of assets in cash and cash equivalents, according to the Capgemini World Wealth Report. But those who aren't hunting for the best yields may pay a hefty price. Although some online banks have offered more-generous yields as the Fed raises rates, many brick-and-mortar banks have been slow to pass on higher rates to depositors.
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