What Is a High-Yield Savings Account? How It Works and When to Use One
What a high-yield savings account is, how its rates work, how it compares with regular savings, money market accounts and CDs, and what to check first.
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High-Yield Savings Accounts
Earn a meaningfully higher rate on savings without market risk.
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What makes a savings account “high-yield”
A high-yield savings account (HYSA) is a savings account that pays an interest rate well above the national average for savings accounts. The FDIC publishes national average rates for deposit products, and competitive high-yield accounts frequently pay several times that average. HYSAs are most often offered by online banks and some credit unions.
High-yield savings vs. other options
| High-yield savings | Traditional savings | CD | |
|---|---|---|---|
| Rate | Variable, usually competitive | Variable, often low | Fixed for the term |
| Access | Anytime (transfers take 1–3 days) | Anytime | Penalty for early withdrawal |
| Insurance | FDIC/NCUA | FDIC/NCUA | FDIC/NCUA |
| Best for | Emergency fund, short-term goals | Convenience next to checking | Money with a fixed timeline |
What to check before opening one
- APY and how often it changes — look at the bank’s rate history, not just today’s rate.
- Fees and minimums — the best accounts have no monthly fees and low or no minimums.
- Transfer limits and speed to and from your checking account.
- Insurance — confirm the bank on the FDIC’s BankFind tool. If a fintech app holds deposits at a partner bank, read how insurance applies.
See the difference
On a $10,000 emergency fund, the gap between a low-yield and a high-yield account can amount to hundreds of dollars a year. Model it in the compound interest calculator, then read what is a high-yield savings account? and compare providers on our high-yield savings comparison.
Frequently asked questions
Are high-yield savings accounts safe?
Yes, when they are held at an FDIC-insured bank or NCUA-insured credit union. Deposits are insured up to $250,000 per depositor, per institution, per ownership category.
Why do online banks pay higher rates?
Online banks typically have lower costs than banks with large branch networks and compete for deposits by offering higher rates.
Can the rate on a high-yield savings account change?
Yes. Rates are variable and can rise or fall, often in line with changes in the federal funds rate. If you want a fixed rate, consider a CD.
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High-Yield Savings Accounts guides
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