High-Yield Savings Calculator

What is a High-Yield Savings Account?

A high-yield savings account (HYSA) offers significantly higher interest rates than traditional bank savings accounts. While traditional banks often pay 0.01-0.5% APY, HYSAs typically offer 4-5% APY or more.

APY vs Interest Rate

• Interest Rate: The base rate paid on your balance
• APY (Annual Percentage Yield): The effective rate including compound interest
• Higher compounding frequency = slightly higher effective return

Benefits of HYSAs

• FDIC insured (up to $250,000)
• No risk to principal
• Liquid - withdraw anytime
• No market volatility
• Great for emergency funds and short-term goals

Where to Find HYSAs

• Online banks (often highest rates)
• Credit unions
• Online-only divisions of traditional banks
• Neobanks and fintech companies

What to Look For

• APY: Higher is better, but compare apples to apples
• Minimum balance: Some require minimums for best rates
• Fees: Avoid monthly maintenance fees
• FDIC insurance: Always verify
• Transfer times: How quickly can you access money?

HYSA vs Other Options

• vs Checking: Much higher rates, but less access
• vs CDs: Lower rates but more liquidity
• vs Money Market: Similar rates, HYSAs often simpler
• vs Investments: Lower returns but zero risk

Best Uses for HYSAs

• Emergency fund
• Short-term savings goals (1-3 years)
• Cash reserve between investments
• Down payment savings
• Travel fund