Future Fortune: Navigating High-Yield Savings Accounts in 2025
Calculating Potential Earnings
To understand the potential earnings from a high-yield savings account, consider a hypothetical scenario where an individual deposits $10,000 into an HYSA with a 3.5% annual percentage yield (APY). Over the course of a year, without additional contributions, the account would accrue approximately $350 in interest. This is a stark contrast to the $5 earned in a traditional savings account with a 0.05% APY.
The power of compound interest further enhances the attractiveness of HYSAs. By reinvesting earned interest, savers can benefit from exponential growth over time. For instance, if the same $10,000 is left untouched in an HYSA for five years, the balance would grow to about $11,877, assuming a constant interest rate and no withdrawals3.