What is a high-yield savings account (HYSA)?

A high-yield savings account is a savings account at an online bank that pays significantly more interest than a traditional bank savings account. Traditional banks often pay 0.01% APY; HYSAs from banks like Marcus, Ally, or SoFi frequently pay 4–5% APY (rates vary with the federal funds rate). HYSAs are FDIC-insured up to $250,000, making them safe and much more rewarding than standard savings.