High-yield savings account

A high-yield savings account, often shortened to HYSA, is a savings account that pays a higher interest rate than a traditional savings account. They are usually offered by online banks and credit unions, which have lower overhead than branch-based banks and pass some of that saving on as a higher rate.

The rate on a high-yield savings account is set by the institution and can change at any time, so it rises and falls with the wider interest-rate environment. In the United States, deposits at an FDIC-member bank are insured up to the legal limit per depositor, per bank, and deposits at a member credit union are insured by the NCUA on similar terms.

A high-yield savings account is a bank deposit product. That makes it different from investing and lending products, which are not deposits, are not FDIC or NCUA insured, and can lose value.