What Is a High-Yield Savings Account?

A high-yield savings account (HYSA) is an account that gets you an annual percentage yield (APY) that’s higher than the national average, which currently sits at 0.41% (as of 1/21/25). Money you have in an HYSA will accrue interest at the APY rate offered by the financial institution that hosts your account.

Every bank offers different APYs, and even those will vary over time, but we recommend seeking out an HYSA with an APY that’s roughly ten times the national average at a minimum — that means that 4.00% APY is a good place to start.

SoFi®, American Express, and CIT Bank all offer HYSAs worth checking out, but the right account for you will depend on a variety of factors.

What is a high-yield savings account?

Savings accounts are designed to help you save money, unlike a checking account, which is meant to help you conduct transactions. Also known as high-interest savings accounts, high-yield savings accounts are bank accounts that work similarly to traditional savings accounts but offer a higher interest rate.

This difference is important. The higher APY that comes with an HYSA means you’ll get a better return on your money.

For example, let’s compare a traditional savings account that earns 0.50% APY to a high-interest savings account that earns 4.00%.

Let’s say you’re like me right after college. I had about $5,000 saved up, and I was just learning about savings accounts and debating which type to open. Assuming I didn’t make any additional deposits, here’s how much I was looking at earning with each type of savings account over the course of three years:

• Regular savings account with 0.50% APY: $5,075.38
• High-yield savings account with 4.00% APY: $5,624.32

That’s a pretty significant difference — needless to say, I chose the high-yield account. It’s also important to note that the gap would be even wider if I kept making additional monthly deposits and left the money there over a longer period of time.

The best high-yield savings accounts

Many of the best savings accounts could be classified as high-yield, but like I said, enough banking institutions offer accounts with 4.00% APY or higher that we’d recommend drawing the line there to make sure you get the most out of your account.

We also recommend looking for an account with no monthly service fees and no-to-low minimum balance requirements. Here are a few good options:

Bank account	APY	Minimum balance	Monthly service fee
Western Alliance Bank High-Yield Savings Premier	4.30%5 <p>The annual percentage yield (APY) is accurate as of 01/24/2025 and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.</p>	$0.01 to earn APY	$06 <p>No account activity or maintenance fees.</p>
SoFi® Savings	Up to 3.80% with direct deposit3 <p>SoFi members who enroll in SoFi Plus with Direct Deposit or by paying the SoFi Plus Subscription Fee every 30 days or with $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either SoFi Plus or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi Plus members are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of Jan. 24, 2025. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a>. See the SoFi Plus Terms and Conditions at <a href="https://www.sofi.com/terms-of-use/#plus">https://www.sofi.com/terms-of-use/#plus</a>.</p>	$0	$07 <p>We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at <a href="http://sofi.com/legal/banking-fees/">sofi.com/legal/banking-fees/</a></p>
American Express® High Yield Savings	3.80% (as of December 17, 2024)8 <p>The Annual Percentage Yield (APY) as advertised is accurate as of December 17, 2024. Interest rate and APY are subject to change at any time without notice before and after a High Yield Savings Account is opened.&nbsp;</p>	$09 <p class="">There is no minimum balance required to open your Account, to avoid being charged a fee, or to obtain the Annual Percentage Yield (APY) disclosed to you.</p>	$0
Wealthfront Cash Account10 <p>Wealthfront Cash account is offered by Wealthfront Brokerage LLC, Member of FINRA/SIPC. Wealthfront Brokerage is not a bank. We convey funds to partner banks who accept and maintain deposits, provide the interest rate, and provide FDIC insurance. Rate is subject to change.</p>	4.00%11 <p>Rate is current as of November 15, 2024.</p>	$0	$0
CIT Bank Platinum Savings	4.35% 12 <p>Platinum Savings is a tiered interest rate account. Interest is paid on the entire account balance based on the interest rate and APY in effect that day for the balance tier associated with the end-of-day account balance. APYs — Annual Percentage Yields are accurate as of December 20, 2024: 0.25% APY on balances of $0.01 to $4,999.99; 4.35% APY on balances of $5,000.00 or more. Interest Rates for the Platinum Savings account are variable and may change at any time without notice. The minimum to open a Platinum Savings account is $100.</p>	$0 (balances under $5,000 earn a lower APY)	$0

Pros and cons of a high-yield savings account

Before you sign up for a high-yield savings account, it’s best to learn about the advantages and disadvantages.

Pros

• Accessibility: Most high-yield savings accounts are offered by online banks and are typically accessible online or via a mobile banking app, making it easy to transfer and deposit money. You can perform pretty much all your transactions online, including opening new accounts, making ACH (Automated Clearing House) transfers, and more.
• A higher rate of return: Since overhead costs for online savings accounts are lower, they’re able to pass on their savings to you by way of a higher interest rate.
• Lower fees: Most high-yield savings accounts don’t charge monthly maintenance fees or other service fees commonly found with traditional savings accounts.

Cons

• Limited features: Not all high-yield savings accounts are the same. Some may not offer features like ATM access or a debit card, meaning you’re limited to depositing and withdrawing funds via ACH, direct deposit, wire transfer, or requesting a check.
• Longer wait for funds: Since your options may be limited to online transfers, you may have to wait a few business days for these types of transactions to process. It’s not exactly helpful if you need cash right away.
• You can’t access a branch: Since most high-yield savings accounts only offer online banking, that means you can’t go in person to do your banking. If not being able to visit a brick-and-mortar bank is a dealbreaker, then you’ll need to consider another option.

One thing to be aware of with all savings accounts, not just high-yield accounts, is that you will likely be limited in the number of withdrawals you can make. To me, this is actually a positive. I don’t want to be able to take money out of my savings all the time. I want to really think if I need that money before I withdraw it from my account.

How to choose the right HYSA for you

Comparing different offerings is helpful since many banks offer varying interest rates and features. That way, you can find the best fit for your needs, whether your priority is earning the highest rates or having more convenient access to your cash.

Here’s what you should consider when comparing high-yield savings accounts:

• Fees: I always make sure to first look at what fees I’ll be charged when evaluating savings accounts. Some banks charge maintenance fees that may take a chunk out of your interest earnings. There could also be other monthly fees or charges, such as excess transaction or balance transfer fees.
• Minimum balance amount: Some accounts have minimum balance requirements that mean you need to keep a certain amount in the account in order to earn interest. I would recommend looking for one with no minimum balance if possible so that you don’t have to worry about tracking how much is in your account.
• Initial deposit requirements: Some minimum deposit amounts are higher than others. Ideally, you would find one that offers a low or $0 minimum deposit, especially if you’re just starting out.
• APY: Some high-yield savings accounts offer high interest rates — but only for a certain period of time. Other accounts may have tiered rates, meaning the interest rate can change depending on how much you have in the account. Make sure to do your due diligence and fully understand what your APY will be with any given account.
• Transfer options: Investigate how you can transfer from one bank account to another as well as if you can deposit money via mobile check deposit or ACH transfers.
• ATM access: Does the bank issue a debit card that you can use at an ATM? And, if so, I would make sure to find out which ATM network the bank uses so you can determine whether there are any in your area. There's no use having an ATM card if you don't have any machines around where you can use it.
• Mobile app and website access: Many banks offering high-yield savings accounts also offer apps to help you manage your money or even help you automate monthly deposits. Make sure the bank you're using offers the sort of digital and website access that works best for you. I personally like to look for apps that provide visualizations and savings goals features that allow me to easily keep track of my savings.

FAQs

Bottom line

When it comes to saving money, high-yield savings accounts offer a significant advantage over standard savings accounts. With competitive rates and the power of compound interest, these accounts could help you reach your financial goals faster.

Ultimately, opening a high-yield savings account can be a smart move to grow your money efficiently and work toward important short-term savings goals or building an emergency fund.