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4 reasons why it's smart to put money in a high-yield savings account even when rates are low

The recent drop in interest rates may have discouraged you from earning anything on your savings, but CNBC Select offers advice on why a high-yield account still makes sense.

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A high-yield savings account is a great place to stash your money as you save for short-term goals, whether you're building an emergency fund, planning a future vacation or looking to make a down payment on a home.

Savings accounts are FDIC-insured, so they're safe, and the money is accessible if you ever need it.

But with the Federal Reserve's recent rate cuts, financial institutions have lowered interest rates on high-yield savings accounts by nearly in half in some cases. You may wonder if still makes sense to open one.

Below, CNBC Select outlines four reasons why it's smart to have a high-yield savings account even as rates have dropped.

1. You can still earn over 16X more money than the national average

If you're not putting your money in a high-yield savings account, you're leaving a lot of cash on the table.

Even though interest rates on high-yield savings accounts now hover around 1%, this yield still outpaces the 0.06% return you'd earn keeping your money in a traditional savings account.

"I do believe that high-yield savings accounts have something to offer, despite the recent rate declines," Scott Cole, an Alabama-based certified financial planner, tells CNBC Select. "The term 'high yield' is always relative, but when compared to typical brick-and-mortar institutions, the rates are still significantly better."

With a high-yield savings account that compounds interest daily, you don't have to start with much to save over time. For example, CNBC Select found that you only need to deposit only $20 per week in the Marcus by Goldman Sachs High Yield Online Savings to save more than $1,000 in one year (which equates to saving less than $3 per day).

2. You earn more with no additional risk

Unlike putting your money in the stock market, you don't take on any risk depositing your cash into a high-yield savings account that is FDIC-insured.

Even when the market is doing well, it's still important to have savings even if the returns aren't as high.

"While the market has rebounded quickly, the stock market also presents 100% risk," Ashley Dixon, a certified financial planner at Gen Y Planning, tells CNBC Select.

In any market, it's important to have some money in an emergency fund, where it still earns interest each day, and you know you can always tap into it if you need to.

"An emergency fund should not be invested in the stock market," Kaya Ladejobi, a New York-based certified financial planner, tells CNBC Select. "The market can move downward at any time and can jeopardize any cash flow you are relying on for day-to-day expenses." 

3. Interest rates will eventually go back up

As the economy recovers, the Fed will raise its rates and the annual percentage yield (APY) on your high-yield savings account is sure to go back up again.

Even if the rate you're earning is lower than it was last year, you're still earning some interest and that can add up over time. The key is that you're saving money, and it is better to start getting in the habit of saving now versus later.

"Yes, the interest rates of high-yield savings accounts are low right now, but the goal of this type of savings account isn't returns," Ladejobi says. "It is for peace of mind and liquidity."

And once the interest rates go up again, you'll earn a greater return on the money that's been sitting in your account and you'll be happy you started when you did. 

To begin, check out our picks of the best high-yield savings accounts below:

4. The best time to start saving is now

While it's always good to earn a high APY on your savings, it's also important to realize that your decision to save money shouldn't be based on interest rates. At the end of the day, it's about stashing away whatever money you can for the future.

Everyone should strive to be in a stable cash position, and a high-yield savings account helps you do that.

"Cash is always important and even more so if one has a lot of uncertainty with regards to income," Cole says. "For those who have lost jobs and [are] receiving unemployment benefits, they are potentially facing a severe cutback in the assistance they are getting, so cash becomes all the more important. Cash has a position of importance regardless of the direction of markets."

Bottom line

Even as interest rates on high-yield savings accounts hover around 1%, it's safe to say that they will eventually go back up — and you should already have your money in one when they do.

If you're saving any chunk of change, a high-yield savings account makes sense. Just make sure the one you choose has no monthly fees, low (or no) minimum balance requirements and an APY that's higher than a normal savings or checking account (like all of our top picks do).

Information about Marcus by Goldman Sachs High Yield Online Savings, Ally Online Savings Account, Synchrony Bank High Yield Savings, Vio Bank High Yield Online Savings Account, and Varo Savings Account has been collected independently by CNBC and has not been reviewed or provided by the bank prior to publication.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.