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6 Things to Look for in a High-Yield Savings Account

For the purposes of this post, we’re going to be talking about choosing a high-yield savings account, or HYSA. We don’t be covering retirement plans or health savings accounts. We need to know how to choose the best way to our money, so it’s available quickly when we need it. Enter the high-yield savings account. Go online and search for a HYSA. These online banks offer a higher interest ratethan anything you’ll get from your local bank or credit union. Most of these accounts are free and don’t have requirements like minimum balances or fees.

If you have a checking account at a bank or credit union, you likely have an attached savings account. The problem with having only one savings account is that everything gets lumped together. As a result, it’s harder to keep track of vacation savings and your emergency fund. And the savings rates are so low, averaging 0.01 percent. A better way to manage your money is to see where the money is going. A HYSA will help with that.

Charly Stoever, a non-binary LatinX money coach and host of the Unicorn Millionaire podcast, is a fan of HYSAs and recommends them over a typical bank or credit union. “The interest rates are astronomically higher than in regular checking and savings accounts because these banks don’t have to pay to hire employees [in a physical location], so they pass on the savings to you with much higher savings rates.”

Look For These Features in a HYSA

  1. “Always confirm it’s FDIC-insured,” says Stoever. “That means that the cash is insured up to a certain amount.” The Federal Deposit Insurance Corporation guarantees that your money is protected up to $250,000 at one (insured) bank. In other words, if you have more than $250,000 in savings, you should open an account at another bank so you’re covered.
  2. Say no to direct deposit requirements. Only sign up for direct deposit if YOU want to. Don’t allow a bank to tell you how to manage your money.
  3. There should be no fees. Some banks charge a maintenance fee; others charge a fee if you fall below a certain balance.
  4. The bank has an app and the app has to be free. At the very least, you should be able to check your balances and transfer money between accounts inside and outside the bank.
  5. The bank either has a bucket or basket system, or allows you to open multiple accounts, which should all be high-yield savings accounts. FOR FREE.
  6. The interest rate should be competitive. As of this writing, these rates range from 4.25 percent to more than 5 percent. Find a bank and stick to it if it works for you.

With all these benefits and features, there are some people who say they prefer the human contact at their banking institution. Stoever’s answer to that is to “focus on talking to regular humans in your life because talking to humans at a [local] branch is not worth losing out on the potential tens of thousands of dollars you’d get in interest in a HYSA.”

Banks like Wells Fargo have people (you can talk to in person) and they scammed the shit out of customers when they opened millions of fake ghost accounts.

Charly stoever

There are online banks that have humans on the other end so you can avoid the robotic nature of so much of our phone communications these days. Ally has an online chat function and will even tell you how long the wait is. Ally is also available 24 hours. CIT Bank has limited daytime hours and no chat function as of this writing.

Other Things That May Be Helpful

  • 24-hour customer service
  • A bonus to sign up (be sure there are no strings attached, such as a minimum balance or direct deposit requirement)
  • Accessibility to funds. Will you get a debit card? Are there fees for withdrawals or deposits?

The Unicorn Millionaire’s Tips on Getting the Most Out of Your HYSA

  • Put all cash in your HYSA (or in multiple ones). There’s no reason to have savings in a low-interest checking or savings account.
  • Only put money in checking when you need to pay something or someone, such as Venmo.
  • Pay all credit cards from your HYSA.
  • If you make more than 10 withdrawals or transfers from your savings account, consider opening a second (free!) HYSA. Stoever has two HYSAs for that reason.

Need a bit more persuasion to see how much more you can earn in a HYSA? As I was researching rates and fees, I was stunned at the audacity of Chase, Bank of America and Wells Fargo charging fees if you don’t set up automatic transfers or maintain a minimum balance for an interest rate of 0.01 percent. And they want US to give our money to them? Not a chance.

Setting up your account

So you’ve opened your HYSA. Now what? Label your account and/or your buckets. Set up your goals and the amount you’re going to save and how often. The cool thing about these banks is that you can set up automatic transfers.

First, connect your funding account. Then set up a schedule and the amount to transfer! Ally does this neat thing where they do round-ups, rounding up your change and transferring it to an account. This makes your money grow faster!

My Ally buckets are:

  • Cats
  • Travel
  • Emergency
  • Cars
  • World Cup 2026
  • Holidays
  • Entertainment (concerts, plays, museums)

Yes, my cats have a savings account! I don’t have pet insurance and I need to save for wellness checks, license renewals and random vet appointments. For my cars, I save for maintenance, tabs and car washes.

Above all, keep your money safe and make it grow. You work too hard for it to sit around! Opening a HYSA is a great way to do that. By putting your money into an account that will pay interest that makes money for you, you’ll continue on the path of financial freedom.

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