CNBC’s Carmen Wong Ulrich discusses the dash to online savings accounts. As the savings rate grows and we begin to save more, we look to online savings accounts as a safe haven for cash.
Online savings accounts in the past years have paid higher rates than savings accounts at traditional banks. Now that investors and savers for that matter have been burned by significant losses in their 401ks, they are now looking for safer places to put money as well as the possibility of earning some interest.
Some think that it might be too good to be true and even question the banks FDIC insurance. The fact that investors and savers are now starting to shift cash into online savings accounts shows that they aren’t confident in other types of investments right now.
Who can blame them? Everything they’ve ever heard has blown up in their face.