Overview
- A high-yield savings account (HYSA) pays a rate well above the FDIC national average for traditional savings accounts.
- The rate is expressed as an annual percentage yield (APY) and is variable, meaning banks can adjust them as per market conditions.
- Funds in a HYSA are fully accessible. Unlike a certificate of deposit (CD), there is no fixed term or early withdrawal penalty.
- Fees, minimum balances, and rate tier structures all affect how much a HYSA actually earns, not just the headline APY.
- Deposits at FDIC-insured institutions, including EverBank, N.A., are covered up to $250,000 per depositor, per insured bank, per ownership category.x
A high-yield savings account (HYSA) is a savings account that pays a significantly higher interest rate than a traditional savings account, usually expressed as an annual percentage yield (APY).
It works like a typical savings account: your deposits are insured, you earn interest over time, and your funds stay fully accessible.
The difference is the rate, which is often several times the national average. Most HYSAs are offered by online banks and digital-first institutions that pass lower overhead cost savings on to depositors through more competitive yields.
How does a high-yield savings account work?
Your deposits in a HYSA are insured up to applicable limits at an FDIC-member bank, and you earn interest over time on your balance. The rate is expressed as APY: the yearly return after accounting for the effect of compound interest. APY reflects what you could earn with compounding factored in.
That rate is variable, which means it can be adjusted by the bank in response to broader market conditions, including shifts in the federal funds rate. Unlike a CD, which locks your rate and your funds for a fixed term and imposes early withdrawal penalties, a HYSA does not restrict access to your money.
That combination, an accessible balance earning a competitive return, is what makes a HYSA a widely used savings vehicle. A traditional savings account at a large national bank often pays well below 1.00% APY; a HYSA at a competitive online bank typically pays several times that.
What should you look for in a HYSA?
Not every high-interest savings account delivers equal value, and the headline APY is only one part of the picture.
Before opening an account, compare these factors side by side.
| Feature | What to look for |
|---|---|
| APY | A competitive rate meaningfully above the current FDIC national average |
| Monthly maintenance fee | No monthly maintenance fee, or one that is easily waived |
| Minimum to open | A low or no minimum |
| Minimum balance to earn the rate | None, or a clearly disclosed tiered structure |
| Compounding frequency | Daily compounding, which is already reflected in the APY |
| FDIC insurance | Standard coverage up to $250,000 per depositor, per insured bank, per ownership category |
| Account access | Full online and mobile banking, including mobile check deposit |
A high rate at an institution that charges a monthly maintenance fee, or requires a large balance to earn the that high rate may return less than it initially appears.
How does a HYSA compare to other savings options?
Choosing the right savings vehicle depends on your balance, your time horizon, and how accessible you want your funds to be. Here is how a HYSA compares to the two most common alternatives.
HYSA vs. money market account
A money market account (MMA) offers checking-style access, including checks, a debit card and ATM access, in addition to online transfers, alongside a competitive rate. Both HYSAs and MMAs use variable rates, and both may be structured with tiered rates depending on the institution.
Some MMAs require a higher minimum balance to earn the highest APY. At EverBank, the Performance Money Market account can be opened in person at EverBank financial centers in California, Florida and New York.
HYSA vs. CD
A CD holds funds for a fixed term, typically 3 months to 5 years, in exchange for a fixed rate that will not change during that period. Withdrawing funds before maturity may trigger an early withdrawal penalty. A HYSA has a variable rate and keeps funds fully accessible.
Each product is built for a different structural need: a HYSA for savings that stay reachable, a CD for balances committed to a defined term.
The EverBank Performance® CD offers terms from 3 months to 5 years with a $1,000 minimum to open.
| HYSA | Money market account | CD | |
|---|---|---|---|
| Rate type | Variable; may be tiered | Variable; may be tiered | Fixed for the full term |
| Liquidity | Fully accessible; standard transaction limits may apply | Fully accessible; checks, debit card, ATM and online transfers; standard transaction limits may apply | Typically not accessible until maturity without an early withdrawal penalty |
| Minimum to open | Varies by institution; some as low as $0 | Varies by institution; some as low as $0 | Varies by institution; commonly $1,000, some as low as $0 |
| Best for | Fully accessible savings | Fully accessible savings with checking-style access | Balances committed for a defined term |
Is a high-yield savings account safe?
Yes, provided the account is held at an FDIC-insured institution, such as EverBank, N.A. The FDIC insures deposits up to $250,000 per depositor, per insured bank, per ownership category.x
This coverage protects the principal you deposit and the interest you have earned.
Who is a high-yield savings account for?
A HYSA is often used by savers who want cash reserves earning above a standard rate while staying fully accessible. Common applications include emergency funds, short-term savings targets, and idle cash between other allocations.
Balances committed for a defined term may fit a CD; balances that also need checking-style access may fit a money market account.
Put your savings to work at EverBank
A high-yield savings account offers a straightforward way to earn a materially better rate on accessible cash without giving up FDIC protection or account access. When comparing offers, look beyond the headline APY at monthly maintenance fees, minimum balance required to earn the highest rate, and how you can open the account.
The EverBank Performance® Savings account is one option built on this model, available to open online nationally with $0 to open and no monthly maintenance fee. See current rates for where each product stands today.
Frequently asked questions
What is a high-yield savings account and how does it work?
A high-yield savings account is a deposit product that typically earns a higher interest rate than a traditional savings account, and is often offered by online banks and digital-first institutions. Deposits are FDIC-insured, interest is often compounded daily, and funds remain accessible without an early withdrawal penalty. The rate is variable, which means it can be adjusted by the bank and can change over time in response to broader market conditions.
What is considered a good high-yield savings account rate?
A competitive HYSA rate sits significantly above the FDIC national average for savings accounts, which has historically remained well below 1.00% APY. Leading online banks tend to offer rates several times the national average.
Can I open a high-yield savings account online?
Most high-yield savings accounts, including the EverBank Performance® Savings account, are designed for online account opening with no branch visit required. Opening channels vary by product and institution; some savings products are available only by phone or in person at financial centers, so it is worth confirming the opening channel before applying.
How much will I earn in a high-yield savings account?
Your earnings depend on your balance, the APY you receive, and how long your funds remain in the account. Comparing accounts by APY, which already reflects compounding, gives the most accurate picture.
Related terms
- Annual percentage yield (APY): the total rate earned on a deposit account in one year, expressed as a percentage and accounting for the effect of compound interest.
- Compound interest: interest calculated on both the initial principal and previously accumulated interest, which can increase total earnings the longer funds remain on deposit.
- Variable rate: an interest rate that can change over time in response to market conditions, bank pricing decisions, and other factors.
- FDIC insurance: protection provided by the Federal Deposit Insurance Corporation (FDIC) covering deposits up to $250,000 per depositor, per insured bank, per ownership category, in the event of a bank failure.x
- Money market account (MMA): a savings product that may offer check-writing and debit card access alongside a competitive rate, which may use a tiered structure based on the account balance.
- Certificate of deposit (CD): a time deposit account that typically holds funds for a fixed term at a fixed interest rate, offering predictable returns in exchange for limited access to funds until maturity.
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