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Finance
High-Yield Savings Account
A savings account — typically from an online bank or challenger bank — offering significantly higher interest rates than standard high street bank accounts.
Types of high-yield savings accounts: easy-access accounts (withdraw anytime, slightly lower rate), notice accounts (must give 30-90 days notice before withdrawing — higher rate in exchange for reduced flexibility), and fixed-rate bonds (lock money away for 1-5 years at a guaranteed rate — highest rates but zero early access). The best rates change frequently as banks compete for deposits and central bank base rates change — comparison sites like MoneySavingExpert, Savings Champion, and Raisin keep track of the current best rates.
Safety: in the UK, the Financial Services Compensation Scheme (FSCS) protects up to £85,000 per person per institution if a bank fails. For larger sums, spreading across multiple institutions maintains full protection. Online-only banks are equally protected as high street banks under FSCS — the perceived safety of a high street brand is not backed by any additional protection. The practical strategy: use a high-yield easy-access account for your emergency fund (3-6 months of expenses), and a fixed-rate bond for money you won't need for 1-2 years — getting the best rate for each purpose.