Why I'm Moving Money Out of My High-Yield Savings Account in May 2025

I love my high-yield savings account (HYSA). It keeps my money safe and easy to get to. I'm earning hundreds of dollars in interest every year with no effort.

But the time has come for me to move some cash to an account where it can earn even more. Here's why -- and why you may want to do the same.

I have enough money in savings to cover an emergency

A high-yield savings account is the perfect place to keep your emergency fund. Your money is safe and FDIC insured, you can withdraw it whenever you need to, and you'll earn a way higher interest rate than the average saver.

Most people want to have at least three months' worth of expenses in their emergency fund. I aim for six months' worth so I'm prepared for worst-case scenarios -- say, losing my job or having a major, expensive health issue.

I recently reached my emergency savings goal, and then I got a big tax refund. So I'm taking that extra cash and investing it for long-term growth.

The stock market is down -- and that's a great reason to invest

I invest in stocks every month, no matter what the market is doing. But when stock prices drop, like they have recently, I try to invest even more. The market will eventually rebound and go on to reach new highs (as it always has), and today's stock prices will look like bargains.

If you're spooked by stock market investing, I have good news: There's an incredibly simple and relatively safe way to profit from the growth of American companies.

I've used this strategy for years, and it's the biggest reason I'm on track to retire early.

1. Open an IRA

An individual retirement account (IRA) is pretty much what it sounds like: an account for retirement savings and investments. And if you don't have one, you could be missing out on huge tax breaks and investing opportunities.

Much like a 401(k), an IRA saves you from investing-related taxes. When you buy stocks, funds, etc., and hold them in your IRA, you won't have to pay capital gains tax or dividend tax. So if you sell an investment at a profit, or receive a dividend payment, the IRS can't touch your earnings.

IRAs do come with one big limitation: If you withdraw funds before age 59 1/2, you'll pay a big penalty (with rare exceptions).

You can open an IRA through any major stock broker. Within minutes, you'll be ready to start investing for retirement -- the smart way. Click here to check out our list of the best stock brokers and open a new account today.

Once your IRA is open, it's time to add some funds and buy some investments. Here's my personal favorite.

2. Buy an S&P 500 Index ETF

The S&P 500 Index consists of 500 of the biggest companies in the U.S. It makes up more than half the stock market. Since 1957, the index has averaged an incredible return of 10% per year.

An S&P 500 ETF is a type of fund that lets you buy a share of all those companies at once. With a single purchase, you'll have a diversified portfolio of stocks from many different industries.

Every major broker sells S&P 500 ETFs, so you can buy one through your IRA online. There are a lot of them, and most have ultra-low fees (known as "expense ratios"). You almost can't go wrong -- just make sure the expense ratio is under 0.1%.

That's it -- open one account and make one investment. It's so simple and effective that it feels like an investing cheat code. Even Warren Buffett recommends it for people who aren't veteran stock-pickers.

Then the only thing left to do is keep investing over time. I set up automatic monthly purchases through my broker, and my retirement savings are steadily growing. If you have money in savings that you won't need within the next few years, then you may want to do the same. Your future self will thank you.