What are the best HYSA best high yield savings accounts?
Let’s start with the definition of high yield savings accounts. What are they, and why do they matter?
This post is all about the best HYSA best high yield savings accounts.
What are high yield savings accounts (HYSA)?
Typically, these are online savings accounts that have higher rates than that of a traditional savings account at a brick-and-mortar bank. The main benefit is the higher interest rate, which is quite substantial. Check this post out to see the pros and cons of a HYSA!
Why do high yield savings accounts (HYSA) matter?
HYSAs are a great option to park your emergency fund, because it’s liquid and offers a fairly high return for something that needs to be easily accessible.
It’s not terribly easy where you can just do a bank transfer, and it would appear instantaneously, so that makes it a great option to have something that’s accessible, but not that accessible.
As a disclaimer, any of the rates presented are as of June 18, 2022.
As you can see, starting with a $5,000 deposit in 2020, with a Traditional Savings Account rate of 0.1%, you’ll have just over $5,250 in 2070 – 50 years later. On the other hand, with a HYSA assuming a rate of 2%, you’ll have over $13k in 2070.
With me so far?
Great! So what are these magical HYSAs? Keep reading for a comparison between 3 popular banks.
Best HYSA
Best High Yield Savings Accounts
Ally Bank
Pro:
- 0.90% APY
- No monthly maintenance fee
- No minimum balance
- Wire transfer, direct deposit, or mobile check deposit available
- ATM access
Con:
- No branches
- No cash deposit
Marcus by Goldman Sachs
Pros:
- 0.85% APY
- No fees
- No minimum deposit
- Easy transfers (same-day transfers)
- FDIC insured (backed by Goldman Sachs)
Cons:
- No branches
- No mobile check deposits
- No ATM network – can’t access money in the account, would have to do a bank transfer.
Varo Bank
Pros:
- 5.00% APY
- No fees
- No minimum deposit
- Wire transfer
- ATM access
- Early paycheck with direct deposit
Cons:
- No branches
- No mobile check deposits
- Monthly requirements
- Savings limit of $5,000
- Limits on transfers
- Cash deposits available through 3rd party retailers (fees)
How do you choose the best HYSA?
This depends on what your priorities are! For me, it’s important for the money to be accessible, but not too accessible, while having the highest rate possible. You may want something different. I’ve broken down which one is best for what purpose, and why!
Accessibility
This is a tie between Ally and Varo. Both have access to ATMs.
Rate
Varo is the clear winner here!
Quick transfer
This goes to Marcus by Goldman Sachs! Same-day transfers? Insane! You normally only get that with internal transfers within the same bank!
So, which HYSA do you prefer?
As you can see, because the funds are liquid and accessible while offering higher returns than traditional savings accounts at a brick-and-mortar bank, high yield savings accounts are great for housing your emergency fund.
