If You're Parking More Than $25K in Your Savings Account, You're Doing It Wrong
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Keeping tens of thousands in your savings account might feel like a good move. But the truth is that it could actually be costing you money.
Let's be clear: Having lots of cash in the bank isn't necessarily a bad thing. But once you've built a solid emergency fund -- say, $25,000 -- your extra cash is better off elsewhere. And if you're still saving with a traditional bank like Wells Fargo or Chase, there are better places to keep your short-term savings, too.
Here's what to do with your emergency fund and where to put the rest of your cash.
Build up your emergency fund first
Your first savings priority should be to build up an emergency fund -- three to six months' worth of living expenses to cover things like job loss, medical bills, and other rude surprises.
Anything beyond that, though, and you're missing out on ways to grow your money long-term, like investing in stocks. Consider: From 1980 to 2024, the S&P 500 returned an average of 12% per year, including reinvested dividends. That's a return that most other investments can't beat. It's also an easy "set it and forget it" way to grow your money long-term.
As for your short-term savings, there's a better place to put that money, too. The average savings account APY is just 0.40%, according to the Federal Reserve, which means most people are earning next to nothing on their cash. Compare that to high-yield savings accounts, which are offering APYs around 4.00%, and there's no contest.
That's 10 times more than the national average for one simple switch. On a $25,000 balance, you could earn $1,000 a year in interest with an HYSA, compared to $100 with the average APY.
The best part? You'll still be FDIC-insured up to $250,000 and still keep total access to your money. When it comes to earning interest on short-term savings, an HYSA is tough to beat.
Ready to supercharge your savings? Open one of our favorite high-yield savings accounts today.
My two favorite HYSAs
I've written about a bunch of savings accounts, but there are only a few I recommend to friends and family. Here are two of them:
1. SoFi Checking and Savings (Member FDIC)
- Annual percentage yield (APY) of up to 4.50% on savings and 0.50% APY on checking with direct deposit
- Up to $50 in no-fee overdraft coverage when you set up direct deposit
- Get paid up to two days early with direct deposit
- No account fees or minimum balance requirements
I dumped Wells Fargo and opened a SoFi® account myself a few months ago, and I'm never going back.
The APY is one of the highest available, sure. But the overdraft coverage, early paycheck access, and lack of account fees are what really set it apart. If you want a way to earn more on your savings while spending less, SoFi® makes it easy.
Ready to get started? Learn more in our full review and open a SoFi Checking and Savings (Member FDIC) account today.
SoFi Checking and Savings
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- Competitive APY on both Savings and Checking
- No monthly account fee
- Welcome bonus up to $300 (direct deposit required)
- ATM access
- Unlimited number of external transfers (up to daily transaction limits)
- FDIC insured (up to $3M with opt-in to SoFi Insured Deposit Program)
- Early access to direct deposits
- Tools to help you track savings goals
- Combo account only; no stand-alone savings or checking
- Maximum Savings APY requires direct deposit
- No branch access; online only
- Overdraft protection requires monthly direct deposit minimum
For those who plan to set up direct deposit with their new account, we think SoFi Checking and Savings (Member FDIC) is hard to beat. Not only does this savings account offer a strong APY, but the linked checking account earns an above-average rate, too -- which is a rare perk. Plus, new customers earn a bonus of up to $300 with eligible direct deposit. Frankly, it's the kind of combo that could make it worthwhile to switch banking relationships.
2. CIT Platinum Savings
- 4.00% APY for balances of $5,000 or more
- No account opening or maintenance fees
- Minimum $100 deposit to open
CIT Platinum Savings has one of the strongest APYs available -- if you keep at least $5,000 in your account.
It doesn't have the bells and whistles of SoFi®, but it's a great choice if you're laser-focused on maximizing interest.
Want to earn 4.00% APY for balances of $5,000 or more? Read our full review of CIT Platinum Savings and open an account today.
CIT Platinum Savings
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- Competitive APY
- No account opening or maintenance fees
- Unlimited number of external transfers (up to daily transaction limits)
- FDIC insured
- Interest compounds daily so your money can grow a bit faster
- Balance requirement for maximum APY
- No branch access; online only
CIT Platinum Savings is a no-frills high-interest savings account that offers one of the highest APYs we've found available today -- as long as you can maintain a $5,000 minimum balance. Plus, customers can make an unlimited number of transfers and withdrawals each month (many savings accounts have monthly limits).
Platinum Savings is a tiered interest rate account. Interest is paid on the entire account balance based on the interest rate and APY in effect that day for the balance tier associated with the end-of-day account balance. APYs — Annual Percentage Yields are accurate as of June 12, 2025: 0.25% APY on balances of $0.01 to $4,999.99; 4.00% APY on balances of $5,000.00 or more. Interest Rates for the Platinum Savings account are variable and may change at any time without notice. The minimum to open a Platinum Savings account is $100.
For complete list of account details and fees, see our Personal Account disclosures.
Our Research Expert
Ryan is a full-time Personal Finance Writer at Motley Fool Money. He’s been covering topics like credit cards and savings since 2022, focusing on helping people who are new to the world of personal finance.