free money

Now that I have your attention, let’s talk about High Yield Savings Accounts (HYSA) - and yes, they are basically free money. These accounts pay a MUCH higher interest rate than a standard savings account, about 30 times higher. This means that the money you keep in your high yield savings account for your emergency fund grows much faster than if you were to keep it in a traditional savings account.

The national average for a savings account is about .03% at some of the bigger banks, but a high yield savings account can offer about 3.0%. Simply put, if you have $5,000 in a standard savings account at the .03% rate you will earn 13 cents in interest, with a HYSA at 3.0% you will make a little more than $12. Over a year, with compound interest and no deposits to your balance, that’s an extra $150. If you left the same money in a traditional savings account, you would earn an extra $1.50. Now $150 might not seem like a lot, but for basically doing nothing, it’s not a bad deal.

If you want to see how much your balance could be or will earn you, you can visit SoFi’s interest calculator: High Yield Savings Account Calculator | SoFi.

If you want to take a deeper dive into emergency funds, savings accounts, and HYSAs, reach out directly to schedule a one-on-one session: info.hermoneystories@gmail.com.