Here’s The Biggest Reason Why I Keep My Emergency Savings in a High-Yield Savings Account (and Why You Should Too)

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I used to keep all my money in one place — Chase Bank. It’s the same ‘ol bank I’ve been using for years. But when my emergency fund grew past $10,000, I realized I could make way more money in interest by opening an online high-yield savings account (HYSA.)Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. Don’t get me wrong, I still love Chase for everyday checking activities.But my emergency fund is now earning over 4% interest in an HYSA.Last year this added up to an extra $798 in my pocket!Why I switched to an online HYSADid you know that online banks can offer rates up to 10 times the national average on savings accounts!? They’re lightyears ahead of old-school brick-and-mortar banks, and crush the rates offered for traditional checking accounts.I’m talking about earning 4%-5% interest, vs. the 0.01% offered at most traditional banks.When I first learned this, It took me about five minutes to choose a large, reputable online bank and open an HYSA. Once I transferred my savings, interest started accruing (and compounding!) immediately.It’s incredible to see my money grow without any effort, and in 2024 I earned $798 in interest — for doing nothing.How much interest can you earn?The more cash you have in savings, the more potential interest you can earn.Here’s a quick look at how much your savings could grow in a year, at different balances and rates:Savings Balance0.01% APY (Big Bank)4.40% APY (Online HYSA)$1,000$0.10$45$5,000$0.50$224$10,000$1$448$20,000$2$897$50,000$5$2,242Data source: Author’s calculations.The APY attached to your bank account makes a massive difference. Cash stored in a plain old checking account earning 0.01% earns you pennies. But with an APY over 4%, you could easily earn hundreds in interest a year — with no added effort.Three extra benefits I didn’t expectSeparating my emergency fund into its own high-yield account came with some other cool upsides:Mental separation. Keeping savings away from my day-to-day checking made it harder to “accidentally” dip into for non-emergencies.Motivation to save more. Watching my savings grow with interest gave me a psychological boost — and made me want to add even more.Simplified budgeting. With savings in a different place, it became easier to track and stick to my spending plan without mixing funds.It’s wild how a small change like moving money to a new account can lead to bigger behavior shifts.Explore more options: Compare all the top HYSAs right now that offer up to 4.40% APY.What are you waiting for?Moving my savings to an online HYSA has paid off big time. Over the years I’ve earned more than $3,000 in interest on my emergency fund. And you can earn similar money if you make the switch too.Your mission this week: Check your current interest rate at your bank. If it’s less than about 3.60%, it’s time to pick a new online HYSA and start earning more interest as soon as possible.You can still keep your old bank around for everyday checking needs! Just move any bigger amounts of cash savings over to snag that higher interest rate.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.JPMorgan Chase is an advertising partner of Motley Fool Money. Joel O’Leary has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.”}]] [[{“value”:”

I used to keep all my money in one place — Chase Bank. It’s the same ‘ol bank I’ve been using for years. But when my emergency fund grew past $10,000, I realized I could make way more money in interest by opening an online high-yield savings account (HYSA.)

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

Don’t get me wrong, I still love Chase for everyday checking activities.

But my emergency fund is now earning over 4% interest in an HYSA.

Last year this added up to an extra $798 in my pocket!

Why I switched to an online HYSA

Did you know that online banks can offer rates up to 10 times the national average on savings accounts!? They’re lightyears ahead of old-school brick-and-mortar banks, and crush the rates offered for traditional checking accounts.

I’m talking about earning 4%-5% interest, vs. the 0.01% offered at most traditional banks.

When I first learned this, It took me about five minutes to choose a large, reputable online bank and open an HYSA. Once I transferred my savings, interest started accruing (and compounding!) immediately.

It’s incredible to see my money grow without any effort, and in 2024 I earned $798 in interest — for doing nothing.

How much interest can you earn?

The more cash you have in savings, the more potential interest you can earn.

Here’s a quick look at how much your savings could grow in a year, at different balances and rates:

The APY attached to your bank account makes a massive difference. Cash stored in a plain old checking account earning 0.01% earns you pennies. But with an APY over 4%, you could easily earn hundreds in interest a year — with no added effort.

What are you waiting for?

Moving my savings to an online HYSA has paid off big time. Over the years I’ve earned more than $3,000 in interest on my emergency fund. And you can earn similar money if you make the switch too.

Your mission this week: Check your current interest rate at your bank. If it’s less than about 3.60%, it’s time to pick a new online HYSA and start earning more interest as soon as possible.

You can still keep your old bank around for everyday checking needs! Just move any bigger amounts of cash savings over to snag that higher interest rate.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.JPMorgan Chase is an advertising partner of Motley Fool Money. Joel O’Leary has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

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