1. What Is a High-Yield Savings Account?
At its core, a high-yield savings account is just like any other savings account—you put money in, and the bank pays you interest. The big difference is in the annual percentage yield (APY).
Traditional savings accounts: Typically pay between 0.01% and 0.10% APY.
High-yield savings accounts: Can pay anywhere from 3% to 5% APY (depending on the market).
That difference might sound small, but it adds up quickly.
Example:
If you have $10,000 sitting in a traditional savings account earning 0.05% APY, you’ll make about $5 in a year. Put that same $10,000 in an HYSA paying 4% APY, and you’ll earn around $400 in interest. That’s the cost of a weekend getaway, a few grocery hauls, or a new laptop—just for choosing the right account.
