On vacation but my money still workin’ 💰I’m earning interest on my High Yield Savings Account (HYSA) every day, even when the market is down like it is right now. Let me answer your FAQ about HYSAs.
What is a HYSA? A high yield savings account is just like any other savings account, but it earns much higher interest. The actual percentage they earn fluctuate, but right now a good one earns around 1.7%. Thats 170 time more than some savings accounts.
Why should I get one? Your low yield savings account earns like 0.01-0.03% interest. Meanwhile inflation is 1-2% a year. Since everything you want to buy is getting 1-2% more expensive and your savings is essentially earning nothing, it is LOSING value. HYSAs right now are earning around 1.7% interest so more in line with inflation, and just so much more money in your pocket.
Is it an investment? NO! Your savings is something that will never lose value while you could lose money with investments.
How much should I keep in there? For me, I don’t have a good reason to keep my savings in anything but a HYSA so my answer is all of your savings (again this is not including investments). I keep 3-6 months living expenses as an emergency fund in my HYSA. Anything above that I invest. This may look different if you’re paying off debt, or if you’re saving for something special.
How do I choose one? Look for anything that is FDIC insured (this means you won’t lose money) and earns at least 1.7%. Some good options are Wealthfront (what I use) or Marcus by Goldman Sachs. Ally is another good one because it has “buckets” to put your money in but the rate is a little lower. There’s tons of other options too!
What’s the downside? The only real downside is that you pay taxes on your earnings if they’re over a certain amount. For me, that’s still worth it because my gains are larger than my taxes.
What are you waiting for????? Go to one of their websites and open one today! - 37 minutes ago