So I cannot exactly remember when I learned about high yield savings accounts (HYSAs), but I do remember the moment I said something about it around my in-laws and was told they don't exist. Now, I will admit I have the kind of personality that doesn't back down easily when I know information is accurate. So with some push back I refuted their belief of it being a fantasy. They based their knowledge on exposure and access. Brick and mortar banks and credit unions in our area did not have them so they believed HYSAs did not exist. I was dipping my toes in understanding personal finance better beyond clipping coupons at that time and was trying to take my finances to the next level. In that moment I felt unconfident and small because I respect older adults who have been buying homes, managing finances, and building wealth longer than I have. I stuffed that knowledge of HYSAs away in my brain (thank you prefrontal lobe) where it sat idle for a couple years.
Fast forward to 2020, after reading a few personal finance articles and books, I felt brave enough to pursue my own personal finance journey with more fervor. I looked up HYSAs with more confidence and understanding that most HYSAs are through an online financial institution. After a pinch of research, I chose an online financial institution (not associated with a credit card company) to start building a more robust savings account. Funny story though. I opened my HYSA in August 2020 but didn't actually fund it. I opened my HYSA and was so petrified with fear that my money (the little I had) would be cyber-hacked from me. This paralyzing fear seemed so funny to me because I knew my HSYA was FDIC-insured (Federal Deposit Insurance Corporation; Federal insurance for banking institutions). The fear came from knowing I was doing something that many people I knew (family, friends) were not doing. It felt scary for me to be the first to veer from the "norm." The people in my circles mainly banked at one bank establishing their one-stop shop for their checking, savings, and personal/vehicle/mortgage loan. "Who was I to be different?" My HYSA sat idle with low funds, I started with $0 for the first couple months and then I felt brave enough to put $20 in the account to "see" if hackers would siphon my hard earned money. At this point if you are not laughing at how ridiculous I was then best believe I am laughing for the both of us! Past me was too paranoid. We were stressing about a global pandemic and here I was stressing about $20 in my HYSA. Come on! Where are the priorities?!
I think it was January 2021 when I finally to put real money in my HYSA. I started treating it like I was supposed to do. My HYSA had a job to do; make me money with high interest than my standard savings account. As of 7/1/23, my standard (brick and mortar) savings account interest rate is 0.4% and my HYSA (online bank) interest rate is 4.0%. That my friend is a HUGE DIFFERENCE. As I write this my HYSA is lower performing compared to other online banks offering as high as 4.95% and there are some advertising 5.0%. I say all of this to repeat what we all know. Knowledge is power but I want to push that further and say Action is power. We can know things but it really doesn't matter until the knowledge is applied.
I write all of this to say "fear is paralyzing, limiting, and burdensome." I let fear hijack my rational thinking and control my financial future. I don't want to just blame fear but also conformity played a major role in me questioning myself. Like I mentioned, the people in my circles (partner, family, friends) had no clue and were not doing extra with their finances outside of banking at their regular bank. Fear and desire to conform trickles and imbues so many more areas of our life but I want to keep this short and not going further into a deep dive of psychological-sociological proportions. If you are getting started, in the midst, or whatever stage of personal finance knowledge and literacy, I hope you find your finance people and build on those circles. Don't be afraid to do something different from the flock.
If you haven't taken the dive into HYSAs there are several available. Use Google to look up High Yield Savings Accounts and take the plunge. It's better than only earning the average savings rate of .42% at your regular bank.
Comments