A high-yield savings account is essentially the same as a traditional savings account with one key difference — high-yield savings accounts pay a higher-than-average APY on deposits. An APY, or annual percentage yield, is the amount of interest earned on an account in one year. The APY for high-yield savings accounts can be anywhere from 3% to over 4.20% — much higher than that of a traditional account.
The national average savings account yield is just 0.63%, according to Bankrate, while some of the best high-yield savings accounts offer rates of over 4%.
