This month, we are continuing our personal finance series talking about High Yield Savings Accounts or HYSAs!

For our first blog in the personal finance series, you can read this at https://stemchangemaker.org/2021/05/30/danis-declassified-guide-to-personal-finance/ .

^{Photo by Tima Miroshnichenko}

Disclaimer: I am not a licensed attorney, accountant, or financial advisor. The information below is for educational purposes only and not a substitute for professional legal, tax, investment, financial, or other advice. 

High Yield Savings Accounts or HYSAs are savings accounts that will pay you on average more money in interest than a typical savings account. For example, my regular savings account’s Annual Percentage Yield or APY ranges from 0.5% to 1.0% whereas my HYSA APY is between 4% to 5.5%! When picking one, look at the APY and if it is FDIC insured. The FDIC or Federal Deposit Insurance Corporation protects the money depositors place in insured banks in the unlikely event of an insured-bank failure. Each depositor is insured to at least $250,000 per insured bank. so regardless of what HYSA you choose, make sure that it is FDIC-insured!

Many HYSAs are online institutions. I personally use Marcus for my main HYSA, but Capital One, and Ally are also great providers. You can set up reoccurring transfers from your checking or other savings account to help you save for your long-term goals. For example, my HYSA includes my emergency fund, wedding savings, pet emergency fund, vacation savings, and money to eventually put toward my student loans. As a reminder from our previous personal finance post, typically you want your goal to be to have 3 to 6 months of expenses in a HYSA to serve as your emergency fund.

Just in 2023, here is how much I have made in interest alone each month:

• January – $47.90
• February – $49.10
• March – $46.11
• April -$54.79
• May – $53.43

In total, I have made $251.33 since January just for having money sitting in my savings account as the APY for Marcus is currently 5.15% as shown in the screenshot below!

^{Screenshot from Marcus HYSA}

Goldman Sachs Bank USA is an FDIC member so this is an FDIC-insured account. This account type has no minimum balance and no fees. If you are interested in opening an HYSA through Marcus, please feel free to use my invite offer at https://www.marcus.com/share/DAN-U2S-JXJT. We both earn a Referral Bonus when you open and fund an Online Savings Account using this link!

In conclusion, an HYSA is a great place for short-term savings goals and your emergency fund. This is not a replacement for investments like 401k, Roth IRA, or separate brokerage accounts. I hope this helps you on your personal finance journey!

What questions do you have about personal finance? Leave a comment below or email us at danitheengineer.blog@gmail.com and I would be happy to answer them through a future blog post!