3 Reasons to Open a High-Yield Savings Account in June

Spend any time in the personal finance space and you'll hear a lot of buzz about how the higher federal funds rate (a response from the Federal Reserve to fight higher inflation) is impacting your money.

One bright spot in this development is the fact that certificates of deposit (CDs), money market, and savings accounts are all paying higher rates than we've seen in a long time. If you've been dragging your feet on opening a high-yield savings account (HYSA), now is a great time to do it. Here's why.

1. You can beat inflation

Is your cash sitting in a big bank savings account, earning just 0.01% APY? I don't want to alarm you, but you're losing spending power! Thankfully, inflation is down from its peak of 9.1% in June 2022 (a 40-year high), but as of the April Consumer Price Index report, it stood at 3.4% year over year.

So if you've got saved cash in an account not earning you at least this much, that money is slowly being eaten away by inflation. But since you can open a high-yield savings account with an online bank that earns 5% (or better), you can beat the inflation monster. Plus, the best HYSAs are FDIC-insured -- so your money will be safe, to boot.

Our Picks for the Best High-Yield Savings Accounts of 2024

Capital One 360 Performance Savings APY 4.25% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings Member FDIC.	APY 4.25% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening.	Min. to earn $0
American Express® High Yield Savings APY 4.25% Rate info 4.25% annual percentage yield as of July 1, 2024 Min. to earn $1 Open Account for American Express® High Yield Savings Member FDIC.	APY 4.25% Rate info 4.25% annual percentage yield as of July 1, 2024	Min. to earn $1
Citizens Access® Savings APY 4.50% Min. to earn $0.01 Open Account for Citizens Access® Savings Member FDIC.	APY 4.50%	Min. to earn $0.01

2. You can easily set goals for your cash

Since HYSAs are most commonly offered by online-only banks, they lean hard on technology, and you'll often get access to a great online banking experience (and mobile app) if you open one. Hands down, my favorite feature of my own HYSA is having the ability to create sub-accounts (several banks offer this -- they might be called "pockets," "vaults," or "buckets," depending on the bank) in it. This makes it so easy to set goals!

I'm using the account to save for my impending home purchase, quarterly freelancer tax payments, travel plans, upcoming dental work, and a few other expenses. I can still keep all that money in one place, earn the same high APY on it, and track my progress every time I log into my account. If you struggle to save, having this extra motivation might help -- it's certainly helped me!

3. You can build an emergency fund

As someone who lived paycheck to paycheck for nearly my entire adult life (until very recently), I have known the pain of having to plunk down a credit card for an unplanned bill, knowing I'd be paying it off with interest for the foreseeable future. Well, why not take advantage of the higher rates and ease of HYSAs and set a goal to start an emergency fund?

Experts recommend having three to six months' worth of cash in a savings account to cover emergency expenses and get you through a period of unemployment, should you find yourself out of a job, but this is a lot of money. It's easy to recommend that, but much harder to actually do it -- especially if you don't earn much.

The nice thing about HYSAs, though, is that the best ones will let you open an account with $0 and build your balance at your own pace. If all you can swing is $25 or $50 a month, that's still something. In a year of saving $50 a month, you'll have $600 (not including any gains thanks to your HYSA's interest rate). That's not a small amount of money -- it might cover your auto insurance deductible if you needed to file a claim, for example. Open a HYSA this month so you can start saving for emergencies -- you won't regret it.

Ready to open a high-yield savings account of your very own? Review our list of the best high-yield savings accounts available now and pick the best one for you.