Your Quick Start Guide to High-Yield Savings Accounts (HYSAs)
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If you've spent any time on my Instagram - @ClarissaExplainsMoney you know I talk about High-Yield Savings Accounts (HYSAs) constantly. And for good reason!
If you commented HYSA on one of my videos, you probably heard the alarm bell: Your money is sitting in a traditional savings account, and it's barely earning anything.
You work hard for your money. Why shouldn't your money work hard for you?
This post is your complete guide to moving your emergency fund and short-term savings into an account that actually pays you back; and yes, I'll share my current favorite accounts at the end!
What is a High-Yield Savings Account (HYSA)?
A High-Yield Savings Account is simply a savings account that pays a much higher interest rate than the national average.
The main concept you need to know is Annual Percentage Yield (APY). This is the rate of return you earn in a year, and it’s the number we use to compare accounts.
Traditional Savings: Usually earns less than 1% APY.
High-Yield Savings: Can earn 4% APY or more!
The Power of Compound Interest
When you have a high APY, you unlock compound interest. This is where you earn interest not only on your initial deposit but also on the interest that has already been added to your account.
Example: If you have $10,000 in a traditional savings account earning 0.10% APY, you make about $10 per year. If you move that same $10,000 to an HYSA earning 4.50% APY, you make about $450 per year!
That extra money is free money, just for moving your savings to a better spot.
Best Uses for Your High-Yield Savings Account
An HYSA isn't a checking account (for daily spending) and it’s not an investment account (for long-term growth). It is specifically for:
✅ Your Emergency Fund: 3 to 6 months of living expenses. It needs to be safe, liquid, and growing.
✅ Short-Term Savings Goals: Money you plan to spend in the next 1-5 years (e.g., a car down payment, a vacation, a new laptop).
❌ NOT for Long-Term Investing: For wealth-building goals 10+ years away, you should look into investments like index funds.
How to Choose the Right HYSA: My 3 Key Checks
When I evaluate a savings account, I look for three non-negotiables:
1. Safety First: FDIC Insurance (or NCUA)
This is the most important step. Always verify that the bank is insured by the FDIC (Federal Deposit Insurance Corporation) or, if it's a credit union, by the NCUA (National Credit Union Administration). This means your money is federally protected up to $250,000 per person, per institution. If it's not insured, run!
2. Fees and Minimums Must Be Zero
The best HYSAs will have:
$0 Monthly Maintenance Fees. You shouldn't have to pay a bank to hold your money.
No Minimum Balance required to earn the advertised APY.
3. Check the APY History
While the APY is variable and can change at any time, I look for banks that have historically offered competitive rates even when interest rates generally dip.
My Favorite High-Yield Savings Accounts
These accounts are what I personally use or recommend based on their current rates, low fees, and excellent user experience.
Disclaimer: APYs are subject to change without notice. Please check the bank's website for the most current rate before opening an account.
| Account Name | Current APY | Monthly Fee | Minimum Balance | Best Feature for Me |
|---|---|---|---|---|
| Jenius Bank | ~4.05 percent | $0 | $0 | Consistently high rate with no minimum deposit or balance requirement. |
| EverBank Performance Savings | ~4.05 percent | $0 | $0 | Integrated checking and money market options. |
| Forbright Bank Growth Savings | ~4.00 percent | $0 | $0 | High yield with an eco friendly mission. |
| Marcus by Goldman Sachs | ~3.65 percent | $0 | $0 | Strong brand and reliable rates. |
Ready to Open an Account? (Your Next Steps)
Opening an online HYSA usually takes less than 10 minutes. Here's all you need:
1. Choose your favorite account from the list above (or one you researched).
2. Gather your details:
Social Security Number (SSN)
Government-issued ID (Driver's license, Passport)
Your current checking account's routing and account number (to fund the HYSA)
3. Complete the online application.
4. Set up an automatic transfer! (This is the most important step for consistent growth.)
Final Thoughts
You've got the knowledge, you've got the list, now it’s time to take action! Opening an HYSA is one of the easiest, lowest-effort financial moves you can make with the highest immediate reward.
If this post was helpful, share it with a friend who is still leaving money on the table!
Have a question about how to calculate compound interest? Drop a comment below!
