What is a High Yield Savings Account?

At YNAB, we love savings accounts. There, I said it.

YNAB is known for being more than a little different from other money apps and we’re proud of that reputation! We’re the one that people get excited—sometimes maybe too excited!—to recommend to their friends and family. The one that talks about spending joyfully rather than cutting spending for its own sake.

Somehow, though, we also got a reputation as the app that thinks you shouldn’t have a savings account. And that couldn’t be further from the truth! We love savings accounts—especially high-yield savings accounts (HYSAs).

Okay, to be fair: sometimes we talk in a wistful tone about how simple it is to use YNAB with a single bank account. And that’s true. But we’re also realists and lovers of earning compound interest! So let’s talk high-yield savings accounts, why they’re great, and how to make them work in YNAB.

What’s a high-yield savings account (HYSA)?

No surprise: A high-yield savings account is an account, usually held at an online-only bank, that pays higher interest than a typical brick-and-mortar bank’s traditional savings account. A HYSA is easy to open and, unlike many money market accounts, typically has no fees, withdrawal limits, minimum deposit, or minimum balance requirements.

You can transfer money between a HYSA and an account held at another financial institution anytime, and the transfer typically takes one business day. If you hold your HYSA at the same bank as your main checking account, transfers are instant.

When opening an HYSA, make sure to look for the FDIC logo (or the phrase “member FDIC”) to let you know that your money is fully insured if the bank goes out of business. A good place to compare HYSAs is at DepositAccounts.com. You can look at both the interest rate and a star rating based on simple criteria like higher interest rates compared to the national average, low fees, customer service, and bank health. (We’re not affiliated with DepositAccounts.com—we just like it.)

HYSAs are safe—every bit as safe as a regular savings account or certificate of deposit (CD) at a brick-and-mortar bank. In the US, assuming it’s an FDIC-insured bank (and most are), if the bank fails, you will get your money back as long as you don’t exceed FDIC limits, which are high enough ($250,000 minimum, and often more) that you are fantastically fortunate if you ever have to think about them.

In fact, sometimes HYSAs are offered by credit unions or brick-and-mortar banks, but you need to be careful. The same traditional bank can offer multiple savings accounts with similar names, and there are multiple factors to consider. You should always check whether the account offers deposit insurance, whether they charge fees like monthly maintenance fees, whether there is a minimum opening deposit, and, of course, the interest rate.

What savings account rates do the best high-yield savings accounts have?

Interest rates fluctuate a lot. In the US, they depend on the Federal Reserve’s decisions and other market factors. As of this writing (in April 2025), a good HYSA in the US is paying around 4% annual percentage yield (APY). That’s a way higher yield for an online savings account than you’ll typically get.

Just for fun, I checked the interest rate on a traditional savings account at a big national bank. It was 0.01%. That is not a typo. On a $5000 balance, 4% is over $16 a month or $200/year. If you’re earning 0.01%, that’s 4 cents a month. Less than a nickel!

So if you’re going to have a savings account, make sure it pays you a competitive interest rate. Every time you earn interest, categorize it as Inflow: Ready to Assign and give those dollars jobs! If you’ve been using YNAB for even a short time, you know that steadily assigning a few dollars a month to a category you really care about pays off faster than you think.

Now that we’ve established what type of savings account you should have, let’s talk about how to manage it in YNAB. All of the advice below applies to any savings account, high-yield or otherwise.

Is a savings account a place to keep your savings?

This probably seems like the world’s most obvious answer: A savings account is where you put your short-term savings money, and your checking account is where you keep money that’s… not saved. Right?

Here’s where YNAB begins to ask you to rethink what you know about money. We do that a lot, and we’re proud of it, but it sure feels weird when you’re getting started in YNAB.

In YNAB, all of the money in all of your categories is there to be spent. That’s the only reason money exists: to spend.

Does YNAB want you to spend all of your money today? Of course not. We’re here to help you make a spending plan. Each dollar can only be spent once, so you set aside money for today’s needs, like Groceries and Dining Out, medium-term stuff like annual bills and home repair, longer-term financial goals, and everything in between:

This looks like the beginnings of a solid spending plan! So let’s pause and ask, “How much of this money is savings and how much is non-savings?”

Hmm… well, Dining Out and Groceries, that’s not savings. Home Repair, that’s for a project a year away, so that’s savings. My Amazon Prime bill is due in June, so that… sort of savings? How much money should I put into my savings account, anyway?

Well, let’s ask the question again…

If a savings account isn’t a place to keep your savings, what is it for?

There are two reasons to keep money in a savings account, and only two reasons: To earn more interest on your money and to protect yourself from someone draining all of your cash if they steal your debit card number

When you put it this way, the answer to “how much money should I keep in my savings account?” becomes obvious: As much as possible without risking overdrawing your checking account. We have a help article about how much to keep in checking so you can earn higher returns in your savings account. 

But that’s a little scary, right? If your savings account has always been the place to “keep money safe,” it feels strange to put money in there that might be spent on groceries.

YNAB asks you to take a leap of trust: instead of relying on your account balances, rely on your categories. Dollars aren’t special because they live in your savings account. They’re special because you’ve assigned them to your Home Down Payment or Disney Vacation or Emergency Fund category. 

When you go to the grocery store, you’ll look to your Groceries category to determine how much you can safely spend, not your checking account. And that’s how YNAB’s categories protect your savings dollars… even better than a savings account!

Two weird, wonderful things about managing your savings account the YNAB way

We’re asking you to lean into the weird, and we know it. Some of the most difficult questions I get from YNABers are about these surprising ways YNAB works with your savings account:

1. Your savings account balance won’t appear separately anywhere in your categories or category groups. (Neither will your checking balance.) 

Remember, your HYSA doesn’t contain special money to be used for special purposes. It’s just money that you’re clever enough to be earning a high APY on. Because that money isn’t special (except in the sense that all of your money is special!), it doesn’t live anywhere special in your categories—it’s just part of the cash that feeds your spending plan.

You can try to make part of your spending plan match your savings account balance, but it’s going to be an exercise in frustration and futility—it won’t work for more than a few days at a time, and it makes saving money harder for reasons we’ll get to shortly.

2. When you make a transfer between checking and savings, nothing changes in your categories. 

You might think, “I’m going to take some money from savings,” and transfer money from your HYSA to checking. But doing that doesn’t change how much money you have, and you already gave jobs to all of the dollars in both accounts. Making a transfer doesn’t make any money available for a purpose that it wasn’t already available for—you already made a decision about that money back when you first received it.

When you manage your savings account the YNAB way, the only reason to make a transfer is because your checking balance is too high (and you can earn more interest) or too low (and you need to transfer money in to avoid overdraft). And those transfers rarely have to happen more than once a month, and often much less frequently than that.

It’s hard to exaggerate how mind-boggling these two principles are if you’re, well, a normal person and are used to looking at your savings account balance saying, “Cool, that’s my savings.” Then YNAB jumps out from behind a pillar and says, “Bwahaha! That’s not your savings, and in fact, savings isn’t real—it’s just delayed spending!”

If your response to that is, “Cool, I’m just going to put all of my money under a mattress now,” that’s totally understandable, but I want to show you one amazing thing that happens when you do savings the YNAB way.

So easy to save

Say I’ve got my HYSA set up in YNAB alongside my checking account. I get paid, my paycheck shows up in Ready to Assign, and I want to put $50 toward a savings goal: a family trip to Alaska happening in 18 months.

Let’s walk through the steps to make sure that $50 gets saved for the Alaska trip and can’t accidentally be spent on anything else.

‍Step 1: Assign $50 to the Alaska Trip category:

Step 2: That’s it. There’s no step 2. No logging into online banking, no making a transfer. Yes, I might decide at some point soon to make a transfer if there’s more money than necessary in my checking account, but that’s a separate decision that’s not directly saving this $50.

Making saving for your personal finance goals this easy and frictionless is a big deal. It’s both intentional and simple—like, this took me three seconds. And the money is saved in every way that matters: YNAB will never, ever take money out of this category. Only I can do that, either by spending it on the Alaska trip or by deciding, intentionally, to move money to a different category.

Where does the money I’ve saved for the Alaska trip live in the bank? I don’t know or care! All I know is that I have the money—it’s in the bank somewhere—and that I’ve got a good chunk of my money safe from debit fraud and earning a decent rate of interest in my HYSA.

With YNAB, you get all of the benefits of using high-interest savings accounts—a higher APY and extra security—plus more frictionless saving and a new mindset that will change your relationship with money for the better.

You’ll find that you’ll not only save more, but also truly enjoy your spending without an ounce of shame or second-guessing.

Enjoy guilt-free spending and effortless saving the YNAB way today! Sign up for a free 34-day trial. No credit card required!

YNAB IRL: “YNAB turned me into a confident, spendful budgeter.”

One YNABer told us they went from feeling “bad with money” to proudly living their most spendful life.

Before YNAB, I juggled multiple accounts—bills, emergency savings, backup savings, daily spending—but had no real clarity. I usually had money, but never knew if it was truly working for me.
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Now, just two months in, my emergency fund is untouched and growing, I’ve built an income replacement fund with over a month’s expenses, and I’m funding next month’s budget mid-month. I’ve even started keeping all my money in a high-yield savings account, which doubled my interest last month.
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YNAB helped me stop guessing and start being spendful—intentional and mindful with every dollar. This is hands down the best financial decision I’ve ever made.