If you have extra cash sitting in a traditional savings or checking account, you could be missing out on free money.
High-yield savings accounts (HYSAs) offer interest rates around 10 times most traditional bank accounts, helping your money grow while still keeping it safe and accessible.
So, what kind of returns can you expect if you park $5,000 in a high-yield savings account? Let’s break it down.
How much interest can you earn with $5,000?
The amount you earn depends on the annual percentage yield (APY) your bank offers. The national average is 0.41%, according to the FDIC. But high-yield savings accounts currently earn rates ranging from 3.70% to 4.50%.
Our Picks for the Best High-Yield Savings Accounts of 2025
 American Express® High Yield Savings Member FDIC. APY 3.70%
Rate info Member FDIC.
| 3.70%
Rate info | $0 | |
 CIT Platinum Savings Member FDIC. APY 4.10% APY for balances of $5,000 or more
Rate info Min. to earn $100 to open account, $5,000+ for max APY Member FDIC.
| 4.10% APY for balances of $5,000 or more
Rate info | $100 to open account, $5,000+ for max APY | |
 Capital One 360 Performance Savings Member FDIC. APY 3.70%
Rate info Member FDIC.
| 3.70%
Rate info | $0 |
Here’s how your $5,000 could grow over time at different interest rates:
APY | Interest Earned in 1 Year |
|---|---|
0.41% (national average) | $20.50 |
1.00% | $50 |
3.50% | $175 |
4.00% | $200 |
4.50% | $225 |
Data source: Author’s calculations. The national average APY is accurate as of March 21, 2025.
That’s a big difference! If your money is sitting in a traditional savings account earning 0.41% APY, you’re essentially earning pocket change. But by moving it to a high-yield savings account with a 4.00% APY, you could make around $200 in a year — just for letting your money sit there.
The power of compound interest
The real magic happens when you let your savings grow over time. High-yield savings accounts typically compound interest monthly or even daily, meaning you earn interest on your interest.
Let’s say you leave your $5,000 in a 4.00% APY high-yield savings account for five years without adding a single dollar. Thanks to compounding, your balance would grow to about $6,083. That’s an extra $1,083 just from interest alone.
If you make regular deposits — say, $100 a month on top of your initial $5,000 — your balance could grow to over $12,000 in five years.
Start earning more than 10 times the national average on your savings today. Check out our list of best high-yield savings accounts now.
Is a high-yield savings account right for you?
A high-yield savings account is great for short-term savings goals, like an emergency fund, a vacation, or a down payment on a home. It keeps your money safe, earns solid interest, and remains easily accessible.
However, if you’re looking for long-term growth, investing in stocks or index funds may offer better returns. The stock market (as measured by the S&P 500) has historically averaged about 10% annual returns — more than doubling what even the best high-yield savings accounts offer.
It’s important to remember that your HYSA interest rate isn’t locked in either. It will fluctuate as the Federal Reserve adjusts national rates, but an HYSA will still out-earn your traditional savings account.
How to open a high-yield savings account
If you’re ready to put your money to work, opening a high-yield savings account is easy. Here’s what to do:
- Compare rates: Look for an account with a competitive APY and no monthly fees.
- Check for requirements: Some banks require a minimum deposit or balance to earn the advertised APY. These aren’t necessarily a dealbreaker, but make sure you can comfortably meet any such requirements before you open the account.
- Open an account online: Many of the best high-yield savings accounts are offered by online banks and can be opened with just a few clicks on the account issuer’s website.
- Transfer your funds: Move your money from your current checking or savings into your new account.
- Set up automatic transfers: Consistently adding money will help your savings grow even faster.
Start comparing rates now and let your money work for you by checking out our list of the best high-yield savings accounts.
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