The power of high-yield savings accounts

Let's start at the beginning. A High-Yield Savings Account (HYSA) is just like a regular savings account, but it comes with a superpower. It pays you more money (in interest) just for keeping your money in there.

Most traditional savings accounts, like the ones at big-name banks, pay you around 0.42% interest. That’s less than half of 1%. If you save $10,000, you’ll only earn $42 per year. That’s barely enough for a nice dinner.

But with a high-yield savings account, you could earn 4% to 5% interest. That same $10,000 would make you $400 to $500 a year—just by sitting in the bank. No stress. No stock market risks. Just more money for you.

Supercharging your savings.

The best part about saving money in higher-interest-earning accounts is compound interest. Instead of just earning interest on the money you deposit (your principal), you also earn interest on the interest you've already earned. Over time, this creates a snowball effect. Your savings grow faster and faster, even if you’re not adding much more.

Let’s say you put $1,000 in a high-yield savings account earning 5% interest annually. After the first year, you'll have earned $50 in interest. In the second year, you don’t just earn 5% on your original $1,000. You earn it on $1,050, which gives you $52.50. The third year, you earn interest on $1,102.50, and so on.

The longer you leave your money in the account (or even add more to it), the more powerful compound interest becomes. It rewards patience. Even small amounts, saved consistently, can grow into something a lot bigger just by sitting in the right kind of account.

Compound interest helps you earn money while you sleep. My favorite moment in savings happened when my interest earned started to be more than my actual deposits.

How to Choose the Right High-Yield Savings Account

When choosing a high-yield savings account, you should consider the following:

1. Higher Interest Rates:
   One of the main attractions of HYSAs is the higher interest rate. While traditional savings accounts might offer a paltry 0.01% APY, high-yield savings accounts can offer rates that are 20 to 25 times higher. This means more money in your pocket just for keeping your savings in the right place.
2. Safety and Security:
   High-yield savings accounts are typically offered by reputable banks and financial institutions, and they come with the same FDIC insurance as traditional accounts. This means your money is safe, up to $250,000 per depositor, per insured bank.
3. Easy Access to Funds:
   Unlike other investment vehicles, high-yield savings accounts offer liquidity and easy access to your money. You can usually withdraw or transfer funds without penalties, making it a convenient option for your emergency fund or other short-term savings goals.
4. No Fees or Minimum Balances:
   Many high-yield savings accounts come with no monthly maintenance fees and no minimum balance requirements. This makes them accessible to everyone, regardless of the size of your savings.

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Where do I sign up?

A lot of the best HYSAs are online. Here are some of the best ones:

Bank Name	APY (as of July 2025)	Minimum Balance	FDIC Insured	Bonus
SoFi Bank	4.00%	$0	Yes	$300 + 0.20% APY Earn up to $300 and +0.20% Boost on Savings APY. Terms apply.
UFB Portfolio Savings	4.01%	$0	Yes	N/A
Axos ONE® Savings	4.66%	$1,500	Yes	N/A
WealthFront	4.00%	$0	Yes	N/A

Tips for First-Time Savers

• Start Small Even $100 in a HYSA earns more than a checking account.
• Automate It Set up recurring transfers from your paycheck.
• Label Your Goals Name your account “Emergency Fund” or “Travel Savings.”
• Check Rates Often Rates can change, so it’s good to review periodically.

What a High-Yield Savings Account won’t do

It's not going to make you wealthy overnight. It’s not a get-rich-quick scheme. It’s a smart, steady way to grow your savings with zero risk. Think of it as a foundation. Once you’ve got your emergency fund growing, then you can explore other ways to build wealth like investing or budgeting for bigger goals.

Need more info? We got you.

Is a high-yield savings account better than a checking account?
Kind of... Checking accounts are for spending. HYSAs help you save= and earn more.

Can I lose money in a HYSA?
No. As long as it’s FDIC-insured, your money is protected.

Can I open more than one HYSA?
Yup. Many people open multiple accounts for different savings goals.

Are online banks safe?
Yes, just make sure they’re FDIC-insured and have good security practices.

Do HYSAs have withdrawal limits?
Some do—usually up to 6 withdrawals per month. Check the bank’s terms.

How often is interest paid?
Most banks pay interest monthly, so you’ll see small increases regularly.

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Start saving smarter.

If your money is currently sitting in a regular savings account, quit it. Banks don't get to hold your money for free. They should pay you the most competitive rates to earn your business. Jump into an account that gives you the best interest rate on your hard-earned savings.

Ready to start comparing? Check out resources like nerdwallet to find the best high-yield savings accounts available now.

^**At the time this article was written, June 1, 2025