My Best Friend Didn't Even Know He Was Earning 0.01% -- I Showed Him This 4.20% APY Account
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A couple weeks ago, I was hiking with my bestie when the topic turned to money. He casually mentioned that he was sitting on about $30,000 in his Wells Fargo savings account.
I almost spat out my Gatorade.
As someone who writes about banks for a living, I know big bank savings accounts are one of the worst places to stash that much cash. Wells Fargo's basic savings accounts pay a measly 0.01% APY, so his $30,000 was basically collecting dust.
If he instead used a high-yield savings account earning 4.20% APY, he could be making over $100 every single month in interest. That's more than $1,200 a year -- all from simply changing where his money lives.
What a difference APY makes
Massive banks like Wells Fargo, Chase, and Bank of America are notoriously stingy when it comes to paying interest on checking and savings accounts. 0.01% APYs are common.
But some top online banks are paying up to 4.20% APY on high-yield savings accounts (HYSAs). These accounts are just as safe and secure, and you can still access your cash anytime.
Here's the difference an APY makes on a $30,000 balance over the course of a year:
| Account | APY | Interest |
|---|---|---|
| Big bank savings | 0.01% | $3 |
| Online HYSA | 4.20% | $1,260 |
That's a $1,257 difference just for picking the right account to keep your cash.
When I explained this to my friend, he had one of those "ah-ha" moments. Making an extra $100 per month for literally no extra work is something worth pursuing.
The LendingClub LevelUp Savings account
One of the best accounts I've come across this year is the LendingClub LevelUp Savings account.
It currently pays 4.20% APY with $250+ in monthly deposits.
I know that can sound like a hassle, but in reality, it's a pretty low bar. My friend could easily route part of his paycheck into the account each month. And once the deposit requirement is met, he earns the higher APY on his full balance.
An important note: Interest rates won't stay high forever. But, even if these top APYs drop to 3.00%, or even 2.00% over the next couple years, that's still miles ahead of basic 0.01% savings accounts.
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LendingClub LevelUp Savings
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- Competitive APY
- No fees
- Easy ATM access
- Unlimited number of external transfers (up to daily transaction limits)
- Requires you to make monthly deposits to earn the best APY
- ACH outbound transfers limited to $10,000 per day for some accounts
- No branch access; online only
The LendingClub LevelUp Savings account has a lot to offer. At the top of the list is its high APY, though you must deposit monthly to earn the best rate. Next is zero account fees, a strong and straightforward perk. Finally, you get a free ATM card, which you can use to withdraw from thousands of ATMs nationwide. Interested? You can open an account with $0.
Answering the big safety questions
My buddy was definitely interested in earning more, but he had a slew of questions first: Are online banks even safe? What happens if I need my money and there are no branches around?
The truth is, online savings accounts are just as safe as the big banks. They're FDIC insured up to $250,000 per depositor. Plus, most have modern apps and websites that make moving money between accounts quick and painless.
ACH transfers, Zelle, mobile check deposits, etc. Most online banks have the same modern tech as big banks (actually, in my opinion fintech banks have better features).
Here's what else the LendingClub LevelUp Savings account offers:
- No monthly maintenance fees
- No minimum balance requirements
- FDIC insurance up to $250,000
- Debit card for withdrawing cash
- ATM fee reimbursement nationwide
Personally, I've been using an online-only bank for years and never had a problem accessing my money. And I've earned over $2,000 in interest since moving my cash to a high-yield account.
Make your savings work harder for you
That innocent hike ended up making my friend an extra $100+ per month.
If you've got money just sitting in a low-rate account, maybe it's time to make the switch too.
A high-yield savings account can turn your cash pile into a steady stream of passive income, with no extra risk or effort.
Compare today's best high-yield savings accounts and start earning more on your money.
Our Research Expert
Joel O’Leary is a full-time Personal Finance Writer at Motley Fool Money, covering credit cards, bank accounts, investing, mortgages, and other personal finance topics. Joel has been writing about personal finance since 2018, previously leading editorial content for the How To Money podcast and serving as a resident writer at Budgets Are Sexy. He bought his first rental property at age 18, funding the down payment with savings from his high school job at McDonald’s -- a testament to his lifelong passion for smart money decisions. His work aims to make personal finance accessible and actionable for everyday readers. When he’s not writing, Joel enjoys surfing and spending time with his family.