Where should your savings actually sit?
What a high-yield account is for, what makes a rate good, what APY measures, and how much of your money belongs somewhere it cannot fall.
How much should I put in a high-yield savings account?
Everything you might need within the next five years, and nothing you will not — that is typically your emergency fund plus any known upcoming costs, such as a deposit, a wedding or a car.
What counts as a good savings account rate?
A good savings rate is one close to the central bank's base rate; a bad one is the near-zero rate most high-street current accounts pay, and the gap between them is usually several percentage points.
What does APY actually mean?
APY is the interest rate with compounding already included, which is what makes two APYs directly comparable even when the accounts compound at different frequencies.
Is my money safe in an online-only bank?
Yes, provided the bank is covered by deposit insurance — in the US that is FDIC cover of up to $250,000 per depositor, per insured bank, and it protects your balance identically whether or not the bank has branches.
How big should my emergency fund be?
Three to six months of essential expenses — not of income — held somewhere you can reach in a day and where it cannot fall in value.