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    If You’re Parking More Than $25K in Your Savings Account, You’re Doing It Wrong

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    By Ryan Wilcox

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    If You're Parking More Than $25K in Your Savings Account, You're Doing It Wrong

    Keeping tens of thousands in your savings account might feel like a good move. But the truth is that it could actually be costing you money.

    Let’s be clear: Having lots of cash in the bank isn’t necessarily a bad thing. But once you’ve built a solid emergency fund — say, $25,000 — your extra cash is better off elsewhere. And if you’re still saving with a traditional bank like Wells Fargo or Chase, there are better places to keep your short-term savings, too.

    Here’s what to do with your emergency fund and where to put the rest of your cash.

    Build up your emergency fund first

    Your first savings priority should be to build up an emergency fund — three to six months’ worth of living expenses to cover things like job loss, medical bills, and other rude surprises.

    Anything beyond that, though, and you’re missing out on ways to grow your money long-term, like investing in stocks. Consider: From 1980 to 2024, the S&P 500 returned an average of 12% per year, including reinvested dividends. That’s a return that most other investments can’t beat. It’s also an easy “set it and forget it” way to grow your money long-term.

    As for your short-term savings, there’s a better place to put that money, too. The average savings account APY is just 0.40%, according to the Federal Reserve, which means most people are earning next to nothing on their cash. Compare that to high-yield savings accounts, which are offering APYs around 4.00%, and there’s no contest.

    That’s 10 times more than the national average for one simple switch. On a $25,000 balance, you could earn $1,000 a year in interest with an HYSA, compared to $100 with the average APY.

    The best part? You’ll still be FDIC-insured up to $250,000 and still keep total access to your money. When it comes to earning interest on short-term savings, an HYSA is tough to beat.

    Ready to supercharge your savings? Open one of our favorite high-yield savings accounts today.

    My two favorite HYSAs

    I’ve written about a bunch of savings accounts, but there are only a few I recommend to friends and family. Here are two of them

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