High Yield Savings Account

Definition

A High Yield Savings Account is a type of savings account that typically offers a much higher interest rate than a standard savings account. These accounts are often found at online banks and credit unions, which have lower overhead costs and can pass the savings on to customers.

Example

If you deposit $10,000 into a high yield savings account with a 3% annual interest rate, you would earn $300 in interest over the course of a year, compared to just $10 with a traditional savings account offering 0.1%.