The ‘High-Yield Lazy Account’ That Can Help Grow Your Savings

Building wealth over time means doing both: saving and investing. It makes sense to put part of your money into assets with higher growth potential, but you also need cash available for emergencies and near-term spending.

That emergency money does not have to sit in a low-interest regular savings account. A high-yield savings account, or HYSA, can let your balance earn more while still remaining easy to access.

What the “lazy account” idea really means

HYSAs typically pay higher annual percentage yields, or APYs, than standard savings accounts. Many are currently paying around 4%. If the bank or credit union is insured by the FDIC or NCUA, deposits are protected up to $250,000 per depositor, per bank, for each ownership category. These accounts also tend to have low or no fees and are simple to manage, which is why they can be described as “lazy.”

You can open one and set up automatic transfers from your checking account, so the money moves over without much effort on your part.

Why it can be better than a standard savings account

Compared with a traditional savings account, an HYSA usually does not add meaningful extra risk, so there is little reason not to use one if you want a higher return on cash reserves.

For example, if you kept $10,000 in a savings account paying 0.38% APY, you would earn only $38 in a year. At 4% APY, the same balance would generate $400.

The main hurdle is finding one, since your current bank may not offer an HYSA. They are often easier to find at online banks, which do not have the overhead of operating physical branches. Money’s list of top high-yield savings accounts can help you compare strong yields, low fees and reasonable minimum deposits.

How to set one up simply

When shopping for an HYSA, focus on accounts with no monthly fees, a competitive APY, FDIC or NCUA insurance and no strict balance rules. After opening the account, connect it to your checking account and turn on automatic transfers.

Even so, a high-yield savings account is not a substitute for investing in long-term assets such as stocks. Also keep in mind that HYSA rates can change, so the APY you see now is not guaranteed to last. Banks may reduce rates at any time, including in response to Federal Reserve moves.