Put $25,000 in a High-Yield Savings Account and Here's What 4.00% APY Does Over a Year
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Earlier this year, I encouraged a friend to move her idle cash (about $25,000) into a high-yield savings account (HYSA). She'd been saving it in a basic Wells Fargo account earning next to nothing. It's been about 10 months since the switch and she's already earned about $830 in interest.
That's the power of a modern high-yield savings account. If you're going to keep cash in the bank anyway, you might as well let it work for you.
Let's break down how much $25,000 can earn at one of today's top rates of 4.00% APY.
Earning interest at 4.00% APY
Savings APYs are shifting downward recently as the Fed started cutting interest rates. But right now there are still some top high-yield savings accounts paying around 4.00% APY.
At 4.00% APY, here's how $25,000 grows:
- One year: Earns about $1,000 in interest
- One month: Around $83
- One day: Roughly $2.75
Meanwhile, a traditional bank paying 0.01% APY would generate barely $2.50 in a full year on the same balance.
So in just one day with an HYSA, you can earn more interest than a big bank pays in twelve months.
Why online HYSAs beat traditional banks
Chasing a high APY isn't the only reason to move your cash pile. There are a handful of other perks you get when switching to a modern bank. Here are a few main ones:
- No annoying fees: Many online HYSAs come with no monthly fees or minimum balance requirements.
- Modern, easy-to-use apps: Fintech banks have amazing apps and dashboards that make it simple to track your savings progress.
- Quick transfers: Moving money is easy with ACH transfers and ability to "link" your existing checking account on the back end to your new bank.
- FDIC insurance: You get the same government protection (up to $250,000 per depositor) that traditional banks provide.
Online banks don't have physical branches, but many still offer free cash withdrawals through broad ATM partnerships.
I've been banking with an online-only bank for years now, and honestly, I've never missed having a branch. The apps are smoother, the experience is easier, and the interest you earn blows traditional banks out of the water.
One of my favorite options right now is SoFi Checking and Savings (Member FDIC). One app for checking and high-yield savings, no account fees, and a competitive APY. Check out our review to see what makes it a strong option.
SoFi Checking and Savings
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Earn up to 4.30% Annual Percentage Yield (APY) on SoFi Savings with a 0.70% APY Boost (added to the 3.60% APY as of 11/12/25) for up to 6 months. Open a new SoFi Checking and Savings account and pay the $10 SoFi Plus subscription every 30 days OR receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 1/31/26. Rates variable, subject to change. Terms apply at sofi.com/banking#2. SoFi Bank, N.A. Member FDIC.
- 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.
When an HYSA makes sense
Checking accounts are great for daily spending and paying bills. But a high-yield savings account is where your short- and medium-term goal money belongs.
These are the kinds of scenarios where you typically stash in an HYSA:
- Building an emergency fund
- Saving for travel or a big purchase
- Holding and saving down payment cash
- Cash being temporarily held in between investments
If you have money you know you won't touch for a set period, certificates of deposit (CDs) are another option. Today's top short-term CDs also offer around 4.00% APY, with the tradeoff being that you lock in the rate for a fixed term and can be penalized for removing your cash early.
Help your cash earn more starting today
If your savings are still sitting in a low-interest account, this might be your moment to upgrade. A high-yield savings account can turn idle cash into something that actually grows real interest.
Whether you're starting with $25,000 or any other amount, earning dollars instead of cents is a smart choice.
Check out our list of the best high-yield savings accounts and put your savings to work today.
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.