Overview
- A traditional savings account typically earns less than a 1.00% APY, below the FDIC national average.
- A high-yield savings account (HYSA) offers the same FDIC insurance protection and liquidity as a traditional account, at a significantly higher rate.
- Savings accounts come in several types, including traditional, high-yield, money market and certificate of deposit (CD), each with different rate structures, access features and minimum balance requirements.
- A joint savings account can be opened by two or more people, and FDIC coverage on joint accounts can extend up to $500,000.x
- Most online savings accounts, including HYSAs, are opened and managed entirely digitally, without a branch visit.
A traditional savings account is a standard deposit account offered by most banks, typically paying well below 1.00% APY, often below the FDIC national average for savings deposits. While these accounts provide a safe place to store cash, they generally offer limited growth potential.
A HYSA works the same way structurally, with FDIC-insured deposits and easy access to your funds, but pays a rate that is usually several times higher.
What is a traditional savings account?
A traditional savings account is the standard deposit product most people open at a bank branch or through that bank’s basic online banking. It is FDIC-insured up to applicable limits, allows you to deposit and withdraw funds with some monthly transaction limits in some cases, and pays interest, but usually at a rate below what online, high-yield accounts offer.
That low baseline rate is often the reason why savers look elsewhere. A traditional savings account at a large bank often pays below the current FDIC national average for savings deposits, which means a meaningful balance can sit for years without growing much.
What are other types of savings accounts?
Beyond the traditional account, there are several types of savings accounts built for different goals. Understanding the landscape helps you choose the right vehicle rather than defaulting to the first account your bank opened for you.
High-yield savings account
A HYSA functions like a traditional savings account, with insured deposits, accessible funds, and interest paid over time, but pays a variable rate, expressed as an annual percentage yield (APY), that typically runs significantly above the national average.
Most HYSAs, including the EverBank Performance® Savings account, are offered by online banks with no minimum balance and no monthly maintenance fee and can be opened without a visit to a financial center.
Money market account
A money market account combines savings-account features with added transactional access, including check-writing, a debit card, and ATM access, in addition to online transfers. Some money market accounts may require a higher minimum balance to earn the highest APY.
The EverBank Performance® Money Market account can be opened in person at EverBank financial centers in California, Florida and New York.
Certificate of deposit
A CD holds your funds for a fixed term, typically 3 months to 5 years, at a fixed rate that does not change during that period. Removing funds before maturity may trigger an early withdrawal penalty. The EverBank Performance® CD offers terms across that range with a $1,000 minimum to open.
Traditional vs. HYSA: side-by-side comparison
Since both are FDIC-insured, liquid savings products, the practical differences between a traditional savings account and a HYSA come down to rate, sometimes fees, and in-person or online account opening options.
| Attribute | Traditional savings account | High-yield savings account (HYSA) |
|---|---|---|
| Typical APY | Often below 1.00%, frequently below the FDIC national average | Significantly above the FDIC national average |
| FDIC insurance | Up to $250,000 per depositor, per bank, per ownership category | Same standard coverage |
| Liquidity | Fully accessible | Fully accessible |
| How to open | Often branch-based, though many banks offer online options | Typically online-first, no branch visit required |
| Fees | Varies by bank; monthly maintenance fees are common | Often no monthly maintenance fee at competitive online banks |
Here is an illustrative scenario: On a $25,000 balance, the difference between a 0.50% APY and a 3.90% APY works out to roughly $850 in additional interest over 12 months, assuming the rate holds steady. That gap is the core reason many savers move idle cash out of a traditional account and into a HYSA while keeping their everyday banking where it is.
Which type of savings account is right for you?
The right account depends on your balance, how often you need access to your funds, and whether you are managing savings alone or jointly.
A HYSA pays significantly more than a traditional account while keeping funds fully accessible, and a CD pays a fixed rate in exchange for holding funds for a defined term.
A money market account includes checks, a debit card, ATM access, and online transfers, all alongside a competitive rate. Any of these can be opened as a joint account, which can extend FDIC coverage to $500,000.
Find your rate at EverBank
A traditional savings account and a high-yield savings account offer the same core protections, but the rate difference between them can add up to real money over time.
The high-yield EverBank Performance® Savings account is one option for an FDIC-insured account featuring a competitive APY that beats the national average, with $0 required to open and no monthly maintenance fee.
See current rates for where the account stands today.
Frequently asked questions
What is the main difference between a traditional and a high-yield savings account?
The main difference is the rate/APY. Both are FDIC-insured and offer similar liquidity, but a high-yield savings account typically pays several times what a traditional savings account earns, often without a monthly maintenance fee.
What are the different types of savings accounts?
The most common types are traditional savings accounts, high-yield savings accounts (HYSAs), money market accounts (MMAs), and certificates of deposit (CDs). Each balances rate, access, and minimum balance requirements differently.
Can I open a joint savings account?
Yes. Most savings account types, including traditional and high-yield accounts, can be opened jointly with a co-owner such as a spouse or family member. FDIC insurance on joint accounts can extend coverage up to $500,000, compared with $250,000 for an individually owned account.x
Is an online savings account different from a regular savings account?
An online savings account is opened and managed primarily through a website or app rather than in person, but it is not a separate savings account type on its own. Many high-yield savings accounts are online accounts, though a traditional-rate account can also be managed online depending on the bank.
Is my money less safe in a high-yield savings account than a traditional one?
No, provided both accounts are held at FDIC-insured institutions. FDIC coverage applies the same way regardless of the rate the account pays: up to $250,000 per depositor, per insured bank, per ownership category.x
Related terms
- Annual percentage yield (APY): the total rate earned on a deposit account in one year, accounting for compound interest.
- Variable rate: an interest rate that can change over time in response to market conditions and bank pricing decisions.
- FDIC insurance: protection covering deposits up to $250,000 per depositor, per insured bank, per ownership category, if a bank fails.x
- Money market account (MMA): a savings product offering check-writing, debit card, and ATM access alongside a competitive rate.
- Certificate of deposit (CD): a time deposit account holding funds for a fixed term at a fixed interest rate, with limited access until maturity.
- Joint account: a deposit account owned by two or more people, each with access to deposit and withdraw funds, with FDIC coverage extending up to $500,000.
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