Retirees, Maximize Returns on Your Cash Stash

Savers with high cash balances face a conundrum: How can they earn competitive yields without sacrificing federal deposit insurance coverage?

As the Federal Reserve raises interest rates, the question takes on greater urgency. Some banks are now offering yields north of 2%, which is the Fed's inflation target, "so for the first time in more than a decade, savers are in a position where they can have a positive after-inflation return without giving up federal deposit insurance protection," says Greg McBride, chief financial analyst for Bankrate.com.

The issue for savers with sizable cash balances -- including many retirees -- is that federal deposit insurance typically covers only