A High-Yield Savings Account, or HYSA, is a bank account that offers a higher annual percentage yield (APY) than a traditional savings account. Many people invest in HYSA’s because of the high APY that they offer. So what are HYSA’s, who should invest in them, and how is their APY so high? We will also explore how risky they are and whether or not they are a substitute for other accounts.
HYSA’s are a type of savings account that offer a higher APY than traditional savings accounts. The reason why they offer such high APY’s is because the banks that offer them are looking to attract new customers and grow their customer base. In order to do this, they offer higher interest rates on these accounts in order to entice new customers.

Banks that are entirely remote and online, without having physical branch locations, may also offer an HYSA because their costs are drastically lowered by not having to maintain real estate. This is an attractive offer to many consumers, however some people may not like that there aren’t any physical branch locations. It is up to each individual to decide what they would prefer.

Who should invest in HYSA’s?
Anyone who is looking for a higher yield on their savings account should consider investing in a High-Yield Savings Account. Look for accounts that are specifically FDIC insured, and from institutions with good reputations.

How risky are HYSA’s?
They are considered to be a relatively safe investment, but there is always some risk involved. The biggest risk with HYSA’s is that the interest rates could change at any time and you could end up earning less than you expected. Generally, your money is safe and should not lose value in an insured and protected HYSA.

Are HYSA’s a substitute for other accounts?
No, they are not a substitute for other accounts. They are simply an option for people who are looking for a higher yield on their savings account. Unlike a money market account, you can withdraw your money at anytime without penalty.

If you’re looking for a higher yield on your savings account, then a High-Yield Savings Account may be right for you. However, it is important to speak with a financial advisor before making big decisions regarding your money. At Rademacher Financial, we can help you locate HYSA options for you, and walk you through the specific benefits of these accounts for you as an individual.

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Rademacher Financial Inc. is an independent advisory firm. Rademacher Financial is not a registered broker dealer. Investment Advisory Services offered through Rademacher Financial, Inc. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Raymond James Financial Services is independent of Rademacher Financial, Inc. Any opinions are those of the author and not necessarily those of Raymond James.