Savings are a key part of any financial plan. They can help you cover an emergency expense or afford a big purchase without going into debt. And however much you have to save, there’s a simple way to make the most of it: Put it into a high-yield savings account.
HYSA interest rates are significantly higher than traditional savings accounts, helping you make the most of compound interest and grow your balance even faster. Just take a look at the examples below to see what a difference this can make.
Here’s how much you’ll earn by depositing $100 into a high-yield savings account each month
How much you save each month depends on several factors, including your budget and savings goals. But let’s say you deposit $100 per month, or $25 per week. Here’s what your earnings will look like in a high-yield savings account versus a traditional one.
APY | APY | Interest earned after 1 year | Interest earned after 3 years | Interest earned after 5 years |
| Traditional savings account | 0.45% | $2.48 | $23.73 | $66.86 |
| High-yield savings account | 5.00% | $27.89 | $275.33 | $800.61 |
This example uses a 5% annual percentage yield, or APY, but some HYSAs offer even higher APYs, so you may even be able to save more than this. Use a compound interest calculator to figure out how much interest you could earn with any account you’re considering.
How much you can earn with larger deposits
Every little bit counts. If you can contribute more than $100 per month to savings, your balance will grow faster. Here’s how much interest you can earn with larger monthly deposits in an account with a 5% APY.
| Monthly deposit | Interest earned after 1 year | Interest earned after 3 years | Interest earned after 5 years |
| $150 | $41.83 | $413.00 | $1,200.91 |
| $200 | $55.77 | $550.67 | $1,601.22 |
| $500 | $139.43 | $1,376.67 | $4,003.04 |
How to choose the right high-yield savings account for you
When you look for a HYSA, finding the most competitive rate is just one of the things you should consider. If an account has the best APY but comes with high fees, it may not be the best choice, for example. Consider each of these factors as you compare options:
- Minimum deposit requirements: Some HYSAs require you to deposit a minimum amount when you open them. If you don’t have a large amount to deposit at first, look for HYSAs with a $0 minimum deposit requirement.
- Minimum balance requirements: Similarly, some accounts require a minimum monthly balance. If you don’t meet this requirement, you’ll pay a fee. If you don’t have a ton to put aside each month, or you want to be able to withdraw from the account without worrying about your balance dipping too low, look for an account with no minimum balance needed.
- Fees: Monthly maintenance, overdraft and other fees can eat into your savings. Look for a no-fee HYSA to hold onto more of your money.
- Branch access: Online-only banks typically offer the highest APYs. However, if in-person service is important to you, look for banks with a physical branch near you.
- ATM access: While many online banks offer easy ATM access, not all do. If you plan on using an ATM regularly, look for banks that have ATM networks or reimburse out-of-network ATM fees.
- Withdrawal limits: Some accounts limit how often you can withdraw or transfer money each month. If you want regular access to the funds in your HYSA, take this into account.
- Federal deposit insurance: Savings accounts at FDIC-insured banks and NCUA-insured credit unions are federally protected for up to $250,000 per person, per institution. That means you won’t lose your money if the bank fails.
- Customer reviews: Search online for customer service reviews, app reviews and general customer satisfaction ratings to get a feel for how others like the account. You can also find customer complaints on sites like Trustpilot to see if customers experience common problems with a bank.