Are High-Yield Savings Accounts Safe? A Low-Risk Option During Market Volatility

September 25, 2026

Summary:
High-yield savings accounts (HYSAs) are considered safe because they’re FDIC-insured up to $250,000 per depositor, per ownership category, protecting your money even if the bank fails. They offer low-risk, stable growth during market volatility while still providing higher interest rates than traditional savings accounts. When choosing an HYSA, compare APYs, fees, and account requirements to ensure it aligns with your financial goals.

High-yield savings accounts (HYSAs) are a popular alternative to traditional savings accounts, and for good reason. During periods of market volatility, more people may look for safer, more stable ways to grow their savings. HYSAs are safer financial accounts that offer a higher interest rate when compared to traditional savings, ultimately helping people accumulate savings more quickly.

Many consumers may be missing opportunities to earn more on their savings by not taking advantage of higher-interest savings options like HYSAs. For those with larger savings balances, using a high-yield savings account can help accelerate savings growth over time.¹

High-yield savings accounts are accessible to many consumers, and it often only takes a few minutes to set up an account. But before you apply for an HYSA, it’s important to understand the pros and cons and how it fits into your broader financial picture.

Key highlights:

High-yield savings accounts offer more financial stability during market volatility and provide a higher interest rate when compared to traditional savings.
The APY determined by the bank can fluctuate depending on broader market rate dynamics, changes in the federal funds rate, and predictions about future federal funds rate changes.
The FDIC secures and supports member banks by insuring deposit accounts up to $250,000 per depositor, per ownership category, per institution. To expand this coverage, consider if your situation is amenable to opening more than one high-yield savings account in different ownership categories. You could qualify for additional FDIC coverage by opening new accounts in different ownership categories that fit your needs—by adding a joint owner or beneficiary—based on the limits on the FDIC's website.
Typically, banks that offer high-yield savings accounts are online-only, meaning they don’t have the overhead of a physical bank. For this reason, banks may offer an HYSA with no maintenance fees.

What are high-yield savings accounts?

High-yield savings account is a term used to describe an interest-bearing deposit account that offers a higher interest rate than traditional savings account. They’re frequently offered by online-only banks but may also be available from your local brick-and-mortar institution. To be eligible to open a high-yield savings account, you generally need to be over 18 years old (unless you’re opening a joint account with a parent or guardian over 18), have a valid government ID like a driver’s license or passport, and have a Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN). Keep in mind that it’s up to each bank to make the final decision on eligibility, so it’s important to check eligibility criteria with the bank you want to use before you apply.

How do high-yield savings accounts work?

High-yield savings accounts work by paying interest on the deposits in the account. The amount an account earns is reflected by its annual percentage yield (APY). The APY is determined by the bank setting an interest rate, can fluctuate depending on broader economic conditions, and in many cases rises and falls alongside the federal funds rate.

Let’s look at an example of how much you might earn using an HYSA versus a traditional savings account. Suppose you open a high-yield savings account and deposit your $10,000 emergency fund. For illustrative purposes, assume the account earns a 3.00% APY with an interest rate of approximately 2.96%, compounded monthly. The goal is to figure out how much interest you’ll earn after one year if you don’t add or take money from the account.

The formula to calculate monthly compound interest (CI) is:

CI = (P*(1+(r/12))^12t) – P

Where P is the principal amount, r is the interest rate in decimal form, and t is time (e.g. 1, for one year).

Based on this simple math, you’ll see that after your first year using a high-yield savings account with this APY and initial deposit amount, assuming the rate stays the same, you’d earn about $300 in interest.

As of August 17, 2026, the national average interest rate on savings deposits is only 0.38%, according to the Federal Deposit Insurance Corporation (FDIC).² If we use the same math and assumptions above with this average rate, your traditional savings account would only earn you about $38 in interest in the first year.

High-yield savings account vs. traditional savings account

A high-yield savings account with a 3.00% APY* and an initial deposit amount of $10,000 would earn approximately $300 in interest after the first year.
A traditional savings account with a 0.38% APY* and an initial deposit of $10,000 would only earn about $38 in interest after the first year.

*The stated Annual Percentage Yield (APY) is for illustrative purposes only and does not necessarily reflect an APY that is currently available. This example assumes the rate does not change during this period and displays an approximate calculation of the interest earnings with rounding as shown.

Benefits of a high-yield savings account

Higher interest rates

Perhaps the number one benefit of an HYSA for most savers is the ability to earn higher interest in comparison with some alternatives. As you search for the right high-yield savings account, it’s important to compare interest rates to ensure you’re getting a healthy return on your money.

Liquidity and easy access

Since deposits in an HYSA remain liquid, the funds are typically easier to access than money invested in other types of accounts like a certificate of deposit (CD) or taxable brokerage account.

Low risk

The FDIC secures and supports member banks by insuring deposit accounts up to $250,000 per depositor, per institution. The fact that you can securely stow away a quarter of a million dollars in an FDIC-insured high-yield savings account makes it a relatively low-risk financial tool. In the event of a bank failure, the FDIC will step in to ensure you have access to your deposits of up to $250,000.

Safe option during market volatility

During periods of stock market volatility, many people turn to safer financial options that protect their principal and provide steady returns. Unlike stocks or mutual funds that may lose value during a downturn, HYSAs maintain their value while earning interest. This makes them a smart choice for those seeking a low-risk alternative to ride out economic uncertainty without sacrificing growth potential.

No maintenance fees

Typically, banks that offer high-yield savings accounts are online-only, meaning they don’t have the overhead costs of a physical bank. For this reason, banks may offer an HYSA with no or low maintenance fees. However, it’s important to confirm with your bank what fees apply to the account. For example, some banks may charge a fee if your balance falls below a minimum amount.

Risks of a high-yield savings account

Interest rate fluctuations

Interest rates on an HYSA are usually variable and subject to change at any time. However, regardless of the economic conditions, the interest returned on an HYSA is typically higher than that of traditional savings accounts.

Withdrawal limits

Depending on the bank you choose, there may be a limit to the number of times you can withdraw money throughout the month. For example, some banks impose a limit of six withdrawals monthly. Confirm any contractually set withdrawal limits with the bank you’re considering before you sign up for an account if you believe you’ll need to move money out of the account frequently.

Minimum deposit amount

Many banks require a minimum deposit to open a high-yield savings account. You may need to save up to $500 or more to open an account, depending on the bank.

Minimum balance requirements

Some banks have a minimum balance requirement that you must maintain in your HYSA. Failure to keep at least the minimum could result in a fee. Check this requirement for the bank you’re considering opening an HYSA with to confirm any minimum balance requirements and ensure you can meet them before you sign up for an account.

Get a high-yield savings account today

If you believe the benefits of an HYSA outweigh the potential downsides, now is a good time to start researching accounts to find the right fit. Look for banks that are FDIC-insured, have a history of great customer service, and offer a high-yield savings account that meets your needs.

A high-yield savings account from Openbank by Santander is a helpful financial tool to consider that could help you get closer to your savings goals. Learn more about how to make an Openbank High Yield Savings account work for you or open an account online.

*Openbank is a division of Santander Bank, N.A., which is a member of the FDIC. Please note that deposits at Santander Bank and Openbank are combined for the purposes of calculating FDIC insurance limits (FDIC Cert #29950) and are not separately insured.

HYSA safety: common questions, answered

The single most important step is to verify who holds your deposits and whether that entity is FDIC-insured. Go to the FDIC’s BankFind tool, search for the bank name or FDIC certificate number, and confirm that the bank is listed as Active. For example, Openbank is a division of Santander Bank, N.A. and the applicable FDIC Certificate found in the BankFind tool is for Santander Bank, N.A.*

Remember, fintech apps typically do not have a banking charter, so deposits may be held at one or more partner banks. In that case, you need to verify who the partners are, whether the deposit insurance applies to you as the depositor, and if the funds are pooled or individually titled in your name. This information should be in the app’s disclosure agreement or terms and conditions statement.

Choosing between a fintech app and a bank comes down to which features matter most to you. Fintech apps tend to have some of the highest APYs, minimal fees, and helpful automation and savings tools. Banks, on the other hand, typically offer established customer protections, regulatory oversight, and the security of working with an FDIC-insured financial institution.

You don’t necessarily have to choose between the two. Some digital banks blend both experiences. For example, an Openbank High Yield Savings account offers a high-yield and modern, fully digital experience backed by the security and expertise of one of the largest and most established banks in the world.

A high-yield savings account is designed to help your money earn interest while keeping your balance secure. If the account is held at an FDIC-insured bank and your deposits stay within applicable FDIC insurance limits, your eligible funds are insured up to the coverage limit.

HYSA funds held at FDIC-insured banks are protected by the FDIC, an independent government agency created to maintain stability and public confidence in the nation’s banking system.

Sources:

¹ Santander - Most Americans Missing Out on Earning Higher Interest on Savings, Santander Bank Survey Finds. Updated May 8, 2024. Accessed August 26, 2026.
² FDIC - National Rates and Rate Caps. Accessed August 26, 2026.

This content is for informational purposes only and does not constitute financial, legal, or investment advice. Please consult Openbank’s website or speak to a representative for the most up-to-date information.