In this post, I discuss high yield savings accounts and how to use them to get the most out of your savings.
I recently opened a high yield savings account (HYSA) a few months ago, and ever since, I’ve been OBSESSED!
If you don’t know what an high yield savings account is, it’s basically a savings account that pays much more than the national average in interest.
I personally have my HYSA through Betterment, and the current APY is at 3.75%. Compare that to the national average of 0.23% APY, and you’d understand why HYSAs are all the hype in the personal finance community right now!
If you don’t already have an HYSA, I’m going to throw out a few ideas on what to use this savings account for (and hopefully “sell you” on opening up your own!).
Emergency Fund
A HYSA is a great place to store your emergency fund, since it will obviously grow your money at a much faster rate than a traditional savings account will.
Especially with inflation not decreasing much anytime soon, now is the perfect time to start your e-fund in an HYSA if you haven’t done so already!
Large Future Purchases
A HYSA is a great place to store money that will go toward large purchases (this is where a sinking fund can come into play as well!), like a new car or college tuition expenses, especially if you aren’t currently investing.
The high interest that these accounts have will bring you toward your savings goals much quicker than your average big bank savings account!
Debt Payoff
I don’t personally have any debt, so I can’t speak to this. However, I would imagine that an HYSA would be an ideal way to save money quicker in order to pay down debts like credit card debt and student loans.
I could be wrong on this though, so feel free to correct me if I am wrong!
Do you have any suggestions on what to use a HYSA for? Also, if you’re currently using one, feel free to comment below what you use it for!