December 8, 2020
In layman's terms, a high yield savings account is essentially an online banking account that allows your money to earn interest that are at higher annual percentage yield (APY) rates* than a normal brick and mortar bank. The rates are compounded based on your amount that you have in your account and usually will reflect the next month on your bank statement.
Examples of some banks that provide high yield savings accounts is Vio Bank, Popular Direct, Synchrony Bank, and Salem Five Direct. Examples of brick and mortar banks include Chase, Bank of America, TD Bank, and Wells and Fargo to name a few. More information about high yield savings accounts can be found on BankRate or NerdWallet.
As I journeyed through life, I was able to learn about different kinds of high yield savings accounts and was able to experiment with a couple of different online banks including VIO, HSBC, and Marcus. At the time, the APY rates were above 2% and the interest that I had earned was pretty decent for having money sitting in an account. However, if you earn more than x amount (I believe it's around $30 in interest, don't quote me on it, though), you will have to pay taxes on it.
A couple of months ago, I found out that interest was against my religion. Therefore, I decided to close all of my accounts (both high yield savings, checkings, and savings) and stuck to three different bank accounts**. The first bank I choose is Discover, which operates completely online, because I enjoy being their benefits. The second one is Chase, a brick and mortar bank, with my checking account. The last one is Suncoast Credit Union, which I had an account with them since 2014. All three banks have online mobile and web applications, making banking easier than before.
*The APY rates do fluctuate with the market and varies monthly.
**All of my accounts are checking accounts.