Most people with $25,000 saved have it sitting in a checking account or a big bank savings account earning somewhere around 0.01% APY. That’s actually what Chase, Bank of America, and most other major banks pay on standard savings accounts right now.

At 0.01%, $25,000 earns you $2.50 a year.

Here’s what happens if you move it to a high-yield savings account.

The math at current rates

The best high-yield savings accounts are paying around 4.00% APY right now. The national average across all savings accounts sits at 0.39%. That’s still far below what the best online banks are offering, but useful as a comparison point.

At 4.00% APY, $25,000 earns roughly $1,000 in the first year.

You do nothing differently. The money just sits there, the same as it did in your old account. The only variable is where it’s sitting.

Year one vs. your current account

The gap between 0.01% and 4.00% on a $25,000 balance is $997.50 a year. That’s money your current bank is keeping instead of paying you. It’s not a fee they’re charging you. It’s just interest they’re not offering, because they don’t have to and most people never switch accounts.

You can compare some of the best high-yield savings accounts available right now and usually open one in less than 10 minutes.

What happens over time

Interest compounds, which means the math gets better the longer you leave your savings alone.

At 4.00% APY, $25,000 grows to roughly $27,000 after two years and about $30,400 after five — without adding a single dollar. At 0.01%, you’re looking at $25,001.25 after two years and $25,012.50 after five.

The difference over five years is more than $5,000. That’s just from choosing the right account.

What to know before you open one

High-yield savings accounts at online banks are FDIC insured up to $250,000, which is the same protection you get at any traditional bank. Most charge no monthly fees and require no minimum balance to earn the advertised rate.

The main tradeoff is that online banks don’t have branches. Transfers to your checking account might take a business day or two. For most people keeping an emergency fund or short-term savings, that’s not a meaningful limitation. Compare our favorite high-yield savings accounts here and start earning around 10x the national average rate today.

Rates are also variable, meaning they can move down if the Fed cuts rates again. The best accounts are still paying meaningfully more than big banks even in a lower-rate environment. But it’s worth knowing the rate you open with isn’t guaranteed.

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