If your is at a big bank like Chase, Bank of America, or Wells Fargo, you're probably earning about 0.01% . That's essentially nothing.
A pays 4-5% APY—that's 400-500 times more.
The Math That Matters
On a $10,000 :
- Traditional bank at 0.01% APY: $1 per year
- High-yield account at 5% APY: $500 per year
Same money. Same safety. $499 more in your pocket.
Why Online Banks Pay More
High-yield savings accounts are typically offered by online banks. Without physical branches to maintain, they pass the savings to you as higher rates.
Don't worry—they're just as safe. They carry the same insurance as any traditional , protecting your money up to $250,000.
What to Look For
Must-haves:
- or insurance
- No monthly fees
- No minimum balance requirements
- Easy transfers to your main bank
Nice-to-haves:
- Mobile app
- ATM access (though you won't use this much)
How to Set One Up
- Choose an online bank (research current rates)
- Open an account online (takes 10 minutes)
- Link your existing
- Transfer your
- Set up automatic transfers for ongoing savings
Common Concerns
"Is my money safe?" Yes. insurance covers you up to $250,000—same as any bank.
"What if I need the money?" Transfers to your checking account typically take 1-2 business days. For true emergencies, most high-yield accounts offer instant transfers up to a certain amount.
"Do rates change?" Yes, high-yield rates fluctuate with the economy. But they'll always be dramatically higher than traditional banks.
The Bottom Line
There's no reason to leave your earning 0.01% when you could earn 5%. The switch takes 15 minutes and earns you hundreds of dollars per year.