If You Have More Than $10,000 in Savings, You'll Really Want to Read This
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A reader emailed me recently to ask how much savings was “too much.”
It turned out she had about $12,000 sitting in an account paying 0.01%.
The problem wasn't the amount. It was the account.
Your bank's rate probably isn't good
Most big banks like Bank of America, Wells Fargo, and Chase still pay close to nothing on savings. Think 0.01% to 0.05%. On $10,000, that's a few dollars a year.
And it doesn't matter that rates were higher last year. If your bank hasn't raised them, you're not seeing the benefit.
Online banks are still paying competitive yields. Many hover around 4.00% APY, which is roughly 400 times what the largest banks offer.
On $10,000, that's the difference between earning about $1 a year and earning around $400.
A high-yield savings account keeps your money safe
A lot of people stick with their old bank out of fear or complacency. They worry that switching feels risky or complicated. But high-yield savings accounts are FDIC-insured just like the big names.
Your money stays safe, liquid, and easy to move. You can transfer funds to checking, make digital payments, and keep your emergency fund accessible.
The only real difference is how much interest you earn. You can compare the best high-yield savings accounts available here.
If you're saving for a goal, the right account accelerates it
Hitting a savings target gets easier when your account actually helps you. For example:
- Saving for a home down payment
- Building a larger emergency fund
- Setting aside money for a big purchase or travel
- Preparing for upcoming expenses like moving, tuition, or medical bills
If your money is sitting in a low-rate account, those goals take longer. Putting it somewhere that pays you more gets you there faster without extra effort.
A few quick steps can earn you hundreds more this year
If you have more than $10,000 saved, here are the simplest moves that have the biggest impact:
- Switch to a high-yield savings account with a competitive APY.
- Keep your emergency fund flexible, but don't let it sit in a low-rate account.
- Use a short-term CD if you don't need all your cash immediately.
- Review your rate a couple times a year, especially after Fed moves.
You worked hard to save that money. Make sure it's working just as hard for you.
Check out our list of the top high-yield savings accounts to compare rates and features now.
Our Research Expert
Jake FitzGerald is a full-time Editorial Strategist and Personal Finance Writer at Motley Fool Money, leading content production and distribution while also writing about credit cards, bank accounts, and other financial products. He has more than a decade of experience editing and shaping financial content to give readers clear, trustworthy money advice. His work focuses on delivering practical insights that empower people to make smarter financial decisions. Off the clock, he’s a fan of college football tailgates and still loyal to his favorite putter -- despite what his short game suggests.