High-Yield Savings Account

Personal Finance

A high-yield savings account (HYSA) is a deposit account, usually from an online bank, paying significantly higher interest than a traditional brick-and-mortar savings account — often 10× to 20× more. In a 5% rate environment, HYSAs from Ally, Marcus, Discover, and Capital One pay 4–5% APY versus 0.01% at big banks. HYSAs are FDIC-insured up to $250,000 per depositor per institution, fully liquid, and accessible online. They're the right home for an emergency fund and short-term savings goals (1–3 years). For longer horizons, investing typically outperforms even high-yield savings after inflation.