High interest savings accounts can be an important investment vehicle that can help you grow your nest egg and work your way to a healthy retirement. Although savings accounts often too good to be true, the reality is that many of them are really not even worth it. If you look at normal savings accounts with a nominal interest rate of 3.5 to 5% it might sound okay, but when you look at all the fees, interest and inflation yo might actually be losing money.

Saving money is important and saving it at the maximum interest rate is really important – especially over long periods of time. Even 0.5% can make a huge difference over a 30 year period. Choosing the right savings account requires a bit more research and making sure that you get put your money in a savings account where your money will work for you is critically important. Here are 3 dangerous things you need to look out for.

1. Penalty Fees

One of the biggest things you need to look out for is penalty fees. With high interest savings accounts there are usually a fixed term where you cannot withdraw your capital. When you do, they penalize you and this can either be a withdrawal fee or a rate penalty or both.

2. Hidden Charges

No matter which bank you are with and no matter how many promises they make, there is always fees and charges. Its normal as they are providing a service and the fee is their payment for the service. The problem is if you are not fully aware of all the charges and you think you are getting more interest than you are actually getting.

3. Variable Rates

Often times banks will lure you in with a very attractive rate only to have a small print clause that the rate only applies for the first 6 months and that you are obliged to commit to a 5 year term. Make sure you read the terms of the investment very closely and make sure that the rate really is a high rate.

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