Why do only online banks offer this? If the rate is 6% and you put in 100k, then does it stay 6% for as long as you have the money in there….even if it’s years? How safe is this and why aren’t more people doing it.
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Answer: online banks have different liabilities that allow them to offer high yield savings. AFAIK, the percentage doesn’t not stay put. It is determined by the federal funds rate so it changes when the government changes their rates.
These are considered very safe because they are not market assets. They are more like loans where you’re the creditor to the bank and they pay you back at 6%. On top of that you get FDIC and SIPC protection.
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