Why Your Rich BFF’s Vivian Tu Says When It Comes to Your HYSA, This One Factor Is More Important Than a Savings Rate

Don't get stuck overanalyzing which account is best -- just pick one and start earning.

Putting money in a savings account is a great way to keep your savings separate from your funds for everyday expenses while earning a little interest. Unfortunately, your local bank isn't helping you maximize your savings potential. According to the FDIC, the national average savings account rate is currently 0.21%. That means if you deposited $100 into your savings account in one year, your balance would grow to $100.21. That's hardly a drop in the bucket considering how much money banks earn lending out your deposits to other customers.

According to Vivian Tu, better known as Your Rich BFF, the best way to maximize your savings is through high-yield savings accounts (HYSAs). The financial influencer and former Wall Street trader says you can earn interest ranging from 1.5% to 2.25% (as of September 2022). Tu says interest rates are currently on the rise, and as federal rates increase, so will the interest rates on high-yield savings accounts.

With banks competing to offer the highest interest rates to attract customers, you want to find the HYSA with the highest APYs. As Your Rich BFF suggests, the most important factor is just to pick an account and apply.

What is a high-yield savings account?

A savings account is a type of bank deposit account designed to store funds for short-term spending goals. National and local brick-and-mortar banks offer traditional savings accounts that earn minimal interest. A high-yield savings account is a type of savings account that is typically found at online banks. They operate exactly like traditional savings accounts, except they earn much higher interest rates and generally don't carry monthly service fees.

Our Picks for the Best High-Yield Savings Accounts of 2024

Capital One 360 Performance Savings APY 4.25% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	APY 4.25% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening.	Min. to earn $0
CIT Platinum Savings APY 4.85% APY for balances of $5,000 or more Rate info 4.85% APY for balances of $5,000 or more; otherwise, 0.25% APY Min. to earn $100 to open account, $5,000 for max APY Open Account for CIT Platinum Savings On CIT's Secure Website. Member FDIC.	APY 4.85% APY for balances of $5,000 or more Rate info 4.85% APY for balances of $5,000 or more; otherwise, 0.25% APY	Min. to earn $100 to open account, $5,000 for max APY
American Express® High Yield Savings APY 4.25% Rate info 4.25% annual percentage yield as of September 7, 2024 Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	APY 4.25% Rate info 4.25% annual percentage yield as of September 7, 2024	Min. to earn $0

Money kept in a high-yield savings account is as safe as deposits in your local bank. Most banks and credit unions protect customer deposits up to legal limits. Bank deposits are FDIC-insured up to $250,000 per depositor per bank. Credit union deposits are insured by the National Credit Union Administration (NCUA) up to $250,000 per share owner, per insured credit union.

Opening an HYSA is more important than finding the highest rate

We all want to earn the highest rates on our savings, as scoring a higher rate helps maximize savings efforts. A high-yield savings account represents one of the best ways to earn high APYs. According to Vivian Tu, "A high-yield savings account may not be the one thing that makes you rich, but it is a way better place to stow away your savings and emergency fund than a traditional bank."

Where does Tu suggest opening a high-yield savings account? "It doesn't really matter," she says. Consumers often get caught in what she refers to as "paralysis by analysis," spending too much time searching for the highest rate instead of earning interest now by opening an account.

As mentioned in her YouTube video, rates fluctuate regularly. High-yield savings accounts come with variable interest rates that can change at any time. The bank offering the highest rates right now may decide to drop them later.

"I wouldn't sign up for any one account just because they currently have the highest rate," says Tu. Your Rich BFF's advice is simple. Choose a brand that has the best user interface you're comfortable using and start growing your savings.

Where to find high-yield savings accounts

You can find high-yield savings accounts at online banks, credit unions, and other non-traditional financial institutions. Online banks have less overhead than local and national banks because they don't have physical locations to manage. Less overhead expenses allow online banks to pass savings onto customers through higher interest rates and fewer bank fees.

Credit unions are non-profit organizations that serve their members. Instead of profiting from customers, credit unions provide additional benefits to members like more competitive APYs and lower fees.

When choosing a high-yield savings account, consider the following factors:

• APYs: Don't get bogged down in locating the bank with the best rate. Shop around for banks that offer competitive APYs and choose one that fits your needs.
• Fees: Fees can cut into interest earned on the account. Check to see if the bank charges monthly or other fees that could eat away at your profits. Choose a bank that doesn't charge a fee or offers easy ways to waive the fees, such as keeping a minimum balance each month.
• Accessibility: Choose an account that allows you to access your funds through the convenient methods you prefer.

As Vivian Tu suggests, don't get wrapped up dissecting which bank offers the highest rate. Choose an HYSA you're comfortable with that earns a competitive rate and start building your savings. If you end up not liking the account, you can always switch to another bank later. The most important thing is to open an account.