A high yield savings account (HYSA) is a type of savings account offered by banks and other financial institutions that provides a higher interest rate compared to traditional savings accounts. The main goal of high yield savings accounts is to incentivize customers to save more money by offering a better return on their savings. This type of account is FDIC-insured, meaning that the deposits are insured up to $250,000, making it a safe option for saving money.
To open a high yield savings account (HYSA), a minimum deposit is generally not required, and the account may come with restrictions such as limited monthly transactions just like a regular savings account. The interest rate on a high yield savings account is usually fixed, offering a consistent return on investment.
High yield savings accounts are a good option for people who want to save for short-term goals, such as an emergency fund or a down payment on a house. The higher interest rate helps grow savings faster and reach financial goals more quickly. They are also a low-risk option for people who want to keep their savings secure. With a high yield savings account, customers can enjoy the convenience of online banking and overdraft protection, making it an attractive option to grow your savings faster and reach your financial goals more quickly.
Currently, high yield savings accounts (HYSA) have interest rates between 3.5% to 4%. Four of the best HYSA are reviewed below.
1. Wealthfront
Wealthfront is an automated investment service firm based in Palo Alto, California, founded in 2008. As of September 2019, Wealthfront had $21 billion assets under management (AUM) across 400,000 accounts.
Currently Wealthfont is offering 4.8% on savings. They have zero account fees, no minimum balance, up to $5 Million FDIC insurance and an incredibly easy to use app to keep track of your savings. Wealthfront also offers robo-advisor investing accounts.
2. Betterment
Betterment is an American financial advisory company which provides digital investment and cash management services based in New York City. They were founded in 2008 and as of 2022 have $34 billion assets under management (AUM).
Currently Betterment is offering 4.75% on savings. Similar to Wealthfront they have zero account fees, no minimum balance, up $1 Million FDIC insurance and an easy to use full service app. Betterment also offers free checking accounts as well as robo-advisor investing accounts and IRA/401k retirement accounts.
3. SoFi
SoFi is an American online personal finance company and online bank. Based in San Francisco, SoFi made a name for themselves with their student loan refinancing but also offers great high yield savings accounts. They were founded in 2011 and as of 2021 have $9 billion assets under management (AUM).
Currently SoFi is offering 4.5% on savings. Similar to Wealthfront and Betterment they have zero account fees and no minimum balance. SoFi savings differs from the other as it’s technically not a bank account – it’s a brokerage account. But deposits are still FDIC insured up to $250K. SoFi offers a full range of financial products making it a great option if you’re looking for a one stop bank for all your financial needs.
4. Robinhood Gold
Robinhood has made quite the name for themselves over the years being the first large brokerage to offer zero commission stock trading. They now are offering a high interest on uninvested funds for those looking to add a high yield savings account within a brokerage account.
Currently Robinhood is offering 4.9% with the Robinhood Gold program. Robinhood Gold costs $5 a month – so you need to have $1225 dollars cash in your account to break even each year. Anything saved above the $1225 is earning a premium savings rate beating out Wealthfront, Betterment and SoFi. The account offers up to $1.5 Million FDIC insurance through their cash sweep program.