Wealth management expert reveals the most common mistake people make when using high-yield savings accounts.

Although high-yield savings accounts can help your money grow faster than traditional savings accounts, many people mistakenly believe that the returns these accounts offer are too good to be true.

Colby Dickson, a wealth management advisor at Northwestern Mutual, tells CNBC Make It that "they believe it's not legitimate."

High-yield savings accounts are insured by the Federal Deposit Insurance Corporation, which is an independent U.S. government agency. This means that up to $250,000 of your deposits are covered in the event that the bank fails.

High-yield savings accounts offered by online banks have lower overhead costs due to not having physical locations and other expenses, which enables them to provide higher rates.

According to the FDIC, the average annual percentage yield for a traditional savings account as of Oct. 16 is 0.46%. Therefore, a $1,000 deposit would earn $4.60 in interest after one year.

High-yield savings accounts can provide APYs of up to 6%, meaning that a $1,000 deposit would earn $60 in interest after one year at a 6% rate.

According to Greg McBride, Bankrate's chief financial analyst, high-yield savings accounts pay 10 times more interest than the average savings account, which increases your balance and allows the additional interest to earn interest as well.

Before transferring your funds to a high-yield savings account, research the bank to ensure it is FDIC insured and check for any fees or minimum balances that may apply.

A high-yield savings account can be a secure and efficient way to increase the growth of your money compared to keeping it in a standard savings account.

"No matter your location or savings amount, there are numerous high-yielding accounts to choose from in the U.S., and you can easily transfer your funds to a place where they will be appreciated with higher returns," McBride states.

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