Watching your Emergency Savings Account sit and earn pennies in interest is never fun. While these accounts won’t grow nearly as fast as our stock investments do, High-Yield Savings Accounts still allow us to earn 12x the traditional savings rate.
Yotta Savings and Ally Bank are the best high-yield savings accounts on the market. They are both FDIC insured, have no minimum fees, and boast the highest APY available on the market today.
Best High-Yield Savings Accounts (HYSAs) Of 2021
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#1: Yotta Savings
- Highest possible APY
- Weekly raffles for prizes up to $10,000,000
- User friendly app
- ‘Buckets’ for categorical saving
The creator launched the app in order to incentivize people to save their money rather than play the lottery by offering a risk-free savings alternative.
While most banks operate on simply paying out a set amount of interest each month, Yotta Savings flips that model on its head. For every $25 you have in savings, you get one raffle ticket for a no-risk lottery that has a chance to win as little as $0.10, or as much as $10,000,000.
The HYSA still pays out a respectable 0.20% APY, but when the prizes are factored in, you can expect to see on average 2.19% APY! Even if you take out the prizes above $10 (which are statistically very unlikely to hit), it still has a 1.85% APY.
- Can take up to 4-5 days to withdraw
- Only available in a mobile app
Since nearly everyone has a smartphone nowadays, the mobile app isn’t a huge inconvenience.
The longer fund transfer time can be a bit annoying for those who need their money ASAP. That being said, it is a small price to pay for the best rates on the market.
This is the bank I use for my Emergency Fund. The $4,500 I have placed there affords me 180 tickets that renew every single week! Attached below is my effective APY when you factor in the 0.2% interest payment along with the prizes. Although I am on the lower end of what is expected, it still smashes the national average coming in at 1.25% APY.
You can download the app here! You can also support the website while getting a free 100 additional tickets with my referral code: SCINVESTMENTS
HYSA #2: Ally Bank
- Competitive APY
- ‘Buckets’ for categorical saving
- One of the first banks to offer HYSA
If the payment setup of Yotta Savings is too daunting for you, and you want something more conventional, Ally Bank is your perfect choice. The 0.50% APY is around the highest you will find, and regardless of interest rate fluctuations over the years, they always can be found near the top.
They were one of the first established online banks that created the competitive market for HYSA we know today, so they have developed a lot of trust and brand loyalty by being pioneers in the space.
Armed with many years of experience of being online only, they have a very robust customer service team that has personally answered plenty of my questions over the phone in a matter of a few minutes.
- Not as high APY as Yotta Savings
The only downside for Ally Bank is that you will likely get about half of the interest you would be receiving from Yotta Savings. However, when you factor in that you are really only losing out on $100 a year comparatively, it is not too hefty of a price to pay.
You can look more into Ally Bank here if it interests you!
What Makes a Good HYSA?
When we are looking for what ingredients make up a great High-Yield Savings Account, we really only care about three things.
- No fees / minimum balances
- High APY (interest rate)
- FDIC insured
No fees / minimum balances
In today’s markets for HYSA, there is simply no good reason to pay a fee. While the vast majority of banks have wised up and gotten rid of fees, some big-name banks like Chase are stuck in the past by charging up to $25 dollars a month just to maintain an account.
Both of the banks I advocate for (Yotta Savings & Ally Bank) have $0 minimums and $0 monthly fees. If you choose to go with a different HYSA, I would strongly recommend you at least check to see if they have minimums or monthly fees, and if they do, avoid them like the plague. You deserve better!
High APY (interest rate)
This refers to how much money the bank will give back to you (interest) every month. For instance, if you have $10,000 in an HYSA that earns 0.50%, you would earn $50 in interest each year, or about $4.20 a month. While this may not seem like tons of money, the goal of an HYSA is to have that money easily available to you.
It’s helpful to understand that these rates are flexible and change over time. For instance, while today the most competitive rates for savings accounts in 2021 hovers around 0.50% interest, Pre-Covid rates got as high as 2.25%! These rates are manipulated by the government in order to attempt to either encourage or discourage you to save your money.
Ideally, we would want our emergency savings fund to beat out inflation, however, with rates as low as they are now (<0.50% APY), we aim to simply cut our losses. Yotta Savings and Ally Bank have some of the highest interest yields out there, getting you the most money back.
When a bank is FDIC insured, it means that individuals deposits are protected, even in the case of bank failures. This is through an independent federal agency known as the Federal Deposit Insurance Corporation (FDIC). While this protection does max out at around $250,000, we only want to use HYSA as a vehicle for our emergency savings fund, not retirement. Therefore we won’t be anywhere near hitting the max limit.
Nearly all banks that offer savings accounts today will be FDIC insured. You can’t be too careful though by double-checking the bank’s savings account details. Yotta Savings and Ally Bank are both FDIC insured, so you know your money is safe there no matter what.
Other HYSA Accounts
If for whatever reason you are unsatisfied with both Yotta Savings and Ally Bank, one of my favorite websites, nerdwallet, has a long list available. I am not sponsored/partnered with nerdwallet, they just happen to be a great resource to find good HYSA’s.
The only word of warning I would give is that some of their recommendations are sponsored, so don’t forget to check for no account minimums, monthly fees, FDIC insurance, and competitive APY’s.
Whether you choose to go with one of the HYSA I recommend here, or one completely separate, don’t forget how important building up an Emergency Savings fund is. There is a good reason why it is the very first step on the path to building wealth.
If you are military, remember to brush up on the special programs that exist just for you, such as the Savings Deposit Program where you can earn 10% interest on deployments!