One of the biggest money mistakes I made in my 20s? Keeping my emergency fund in a traditional savings account that earned very low interest (.01% APY - YIKES).
An emergency fund is your financial safety net. It's a stash of cash you keep to cover unexpected expenses like medical bills, car repairs, or sudden job loss.
Where you keep that money matters, and a high-yield savings account (HYSA) is one of the best options. Here are my top picks for high yield savings accounts.
Here’s why your emergency fund belongs in a high yield savings account ("HYSA"):
Earn More Interest: HYSAs offer significantly higher interest rates than traditional savings accounts, helping your emergency fund grow faster, even while it sits untouched.
Easy Access: Unlike investments, your money remains liquid and accessible, allowing you to withdraw quickly in an emergency without penalties.
No Risk: Always choose a HYSA that is "FDIC insured up to $250,000." This means your money will be protected by the Federal Deposit Insurance Corporation (FDIC) in the event of a bank failure.
Motivational Boost: Seeing your savings grow can encourage you to stay on track with your financial goals.
An emergency fund is about peace of mind, and keeping it in a high-yield savings account ensures your money works harder for you without sacrificing security or accessibility. If you don’t already have one, now’s the time to open an HYSA and start building your financial safety net!
