High-Yield Advantage
Experts recommend high-yield savings accounts to grow funds faster for long-term financial goals
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Parking your savings in a high-yield account instead of a regular bank account could earn you more than ten times the interest. WFSB reports that financial educator Kionnie Epps, founder of The Responsible Homegirl, is pushing consumers to make the switch — especially those saving for big purchases that take months or years to reach.
The national average interest rate for a traditional savings account sits at just 0.45% APY. Top high-yield accounts currently offer 4.50% to 5.25% APY. On a $10,000 balance, that gap means $45 in interest versus up to $525 in a single year, according to data from Bankrate.
The "Friction" Strategy That Makes You Save More
Epps calls her approach the "Friction Savings" method. The idea is simple: keep your savings at an online bank that is separate from your everyday checking account. Moving money between them takes one to three business days. That delay is the point.
"The transfer delay isn't a bug; it's a feature," Epps said. "By putting your money in a separate online high-yield account, you create a buffer that forces you to think before you spend your future on a present-day impulse." WKYT notes that Epps recommends keeping both a traditional local account and an online high-yield account — the local one for daily spending, the online one for long-term goals.
How the Yield Gap Between Banks Got So Wide
The gap between traditional and high-yield savings rates grew sharply after March 2022. That is when the Federal Reserve began raising interest rates aggressively to fight inflation. The Fed pushed its benchmark rate from near zero all the way to 5.25%–5.50% by mid-2023.
Online-only banks — like Ally, SoFi, and Marcus by Goldman Sachs — have lower costs than brick-and-mortar banks. They pass those savings to customers in the form of higher interest rates. Traditional banks, which kept savings rates near 0.01% for years, have been slow to compete, according to Hawaii News Now.
FDIC Insurance Keeps Your Money Safe at Online Banks
A common worry about online-only banks is safety. Epps and financial experts say consumers should always check that their high-yield account is FDIC insured. The Federal Deposit Insurance Corporation guarantees up to $250,000 per depositor if a bank fails. That limit applies per bank and per account ownership type.
The FDIC and the Consumer Financial Protection Bureau are expected to increase oversight of online bank partnerships to make sure customers clearly understand the $250,000 protection limit, according to WABI. As long as the account carries that FDIC label, your money is just as safe as it would be at a big traditional bank.
Who Benefits Most From Making the Switch
Epps specifically highlights high-yield accounts for people saving toward a home down payment or other goals that take one or more years to reach. A 2025 Pew Research study found that 42% of adults under 40 now hold at least one account with a digital-only bank, up from just 18% in 2021.
Behavioral economists back up Epps' approach. Adding friction to the withdrawal process is a known "pre-commitment strategy" — it protects people from impulsive spending. The main caution: low-to-middle income savers who may need quick access to cash should plan ahead, since transfers are not instant, notes KPTV.
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