Back to Basics: High Yield Savings Accounts
Disclaimer: I am not a financial advisor. Nothing in this post should be used as financial advice. I am simply sharing my personal experience and what I have observed in regards to finance. Please contact a financial advisor if you are in need financial advice.
Let’s talk money! Unless you grew up with parents who were well versed in finances, it is likely that you have had to do a lot of learning on your own when it comes to money! Or maybe you are trying to learn more about it but all of the information on the internet is confusing you. Regardless of your introduction to finances, most of us are still learning how to organize, save, and spend our money efficiently. That is why we are creating a series called “Back to Basics”, where we dive not-so-deep into all of the different areas of finance to give you a generalized understanding of how your money works.
High Yield Savings Accounts
A High Yield Savings Account or HYSA is is a type of bank account created for individuals to deposit money and is designed to earn you a much higher interest over time compared to a traditional savings account. It typically offers up to a 4-5% interest rate; whereas, a traditional savings account currently, in 2025, averages a .45% interest rate. This means that an additional 4-5% of the money that is sitting in your HYSA will be added to your account each year! Cool right?
This kind of bank account can be held at a brick-and-mortar, which is a physical banking branch you can visit in person, at an on online bank or with a credit union. A HYSA are considered low-risk and they are “touchable” which means you can easily withdraw or transfer money to and from this account with no penalties. This, however, can vary depending on your bank, so be sure to check with your bank provider before doing so!
Must Know Tips
Many institutions will offer a $0 minimum or a very low minimum balance to open a HYSA, although, there are certain institution that require a higher minimum of $100 or more to open one up as well. Be sure to ask your bank provider what the minimum balance requirement is to ensure you are financially able to open one. This balance, however, is not always the same amount that is required to maintain the account. Minimum monthly balance requirements may also vary depending on the bank you are holding your account with. This goes for all kinds of bank accounts, and is important information to be aware of when starting any type of checking or savings account.
Limitations
Although HYSA are a great way to begin building your savings, they are not necessarily the most ideal for long term savings and growth. Often times these types of savings accounts cannot keep up with the rate of inflation. It is important to weigh out all of your options and learn about the different types of savings accounts to ensure you are opening the right one for you and your circumstances. We will be diving deeper into several other types of savings accounts in the future of this series, so be sure to follow along for more!
More of The Weekly Club!
I hope you learned something new reading this post! Next month we will be continuing our “Back to Basics” series with a post about Retirement Accounts. If you would like to read one of our previous blog posts regarding finance click the button below!
