Easy money is the best kind of money. Whether it’s a dollar found on the sidewalk or $1,000 won in a raffle, there’s no better feeling than collecting cash you didn’t have to work for.

That’s the feeling I get every time I check the balance of my high-yield savings account. I earn interest on the money that’s sitting in that account, and it feels like I won a prize every time I check it.

My husband and I have 11 high-yield savings accounts with Ally, and we wouldn’t have it any other way. 

What is a high-yield savings account?

High-yield savings accounts are one of the easiest ways to maximize your money without taking any unnecessary risks. 

Let’s say you have a traditional brick-and-mortar bank savings account, paying .03% APY on a balance of less than $2,500. This is a pretty typical interest rate and similar to what other major banks offer. In a year, you’d earn $0.40 worth of interest. After five years, you’d earn $2.

If you opened a high-yield savings account that was offering a 1.7% APY, for example, you’d earn $17.80 in a year or $89 in five years on the same balance. That’s more than 40 times more than you’d get from a typical bank.

The difference is amplified the more money you have in the account. If you have a $10,000 savings account at a typical bank and contribute $100 every month, you’d earn $3.80 in interest annually. If the money was in a high-yield savings account with a 1.7% APY, you’d earn $228.80 in one year. 

Both traditional and high-yield savings accounts are FDIC-insured, meaning you’re protected in case the bank goes under. This is why you should always use a high-yield savings account instead of a traditional one — the risk is exactly the same, but the return is much bigger with a high-yield account. 

In my experience, having a high-yield savings account also motivates people to save more. If you can see that putting money away yields more money, you’ll have more of a reason to save. 

Why I chose a high-yield savings account

I’ve had a savings account since college, but I didn’t always have a high-yield account. I was attached to my brick-and-mortar bank, which only offered low-rate savings products.

Opening a new bank account and closing out an old account is a hassle — especially because you don’t see any immediate rewards — so I put off making the change until long after high-yield accounts started becoming popular.

It can take several hours to open a new account, transfer your money, and close the old account. You also have to make sure any external transfers are switched to your new account. When you’re tired and busy, an extra $17.40 a year may not seem worth the effort. 

Eventually, I realized how much money I’d lost by not having a high-yield account for the previous five years — it added up to over $1,200. I didn’t want to look back in another five years and regret not switching. 

If you’re on the fence about moving away from your traditional savings account, consider this: In five years, will you wish you had switched? If the answer is yes, then set aside an afternoon to make the change.

How I chose my high-yield savings account

Nowadays, there are lots of high-yield savings accounts on the market, many with no minimum requirements and no fees. I chose Ally Bank, partly because I’d seen it frequently mentioned as one of the best online banks. 

Ally also has a huge presence at the financial media conference I attend every year, FinCon, and its reps have always been honest and respectful. 

When I opened my account with Ally, it was offering 1.8% interest on its savings accounts, one of the best rates at the time. Since then, the rate has dropped because of multiple rate cuts from the Federal Reserve. This is pretty typical, as most banks tie their interest rates to the market. If the Fed raises rates, the banks will likely increase theirs too. 

One of the main reasons I chose Ally is because it allows customers to open multiple high-yield savings accounts and assign them nicknames. I use these different savings accounts for various goals, like a vacation to Ireland, a kitchen renovation, and future car repairs. Currently, my husband and I have 11 savings accounts.

Ally’s online interface makes it easy to see how much I have saved for each goal, and how much I’ve earned in interest this year — currently $44.31. In all my years of banking with a regular savings account, I only earned about $5 in interest total. 

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