Today’s excellent savings rates have made high-yield accounts popular with Americans of all ages. In the past, it wasn’t always easy to earn returns of 5% a year without compromising on safety or accessibility. That’s exactly what top high-yield savings accounts offer at the moment.
But for millennials — aged between 28 and 43 right now — those accounts hold a special appeal. Studies show millennials are more likely than other generations to look for safer places to park their cash. At the same time, millennials are internet pioneers who are willing to break away from norms. As such, they’re well-positioned to switch to the best online accounts.
Here are three great reasons why millennials love high-yield savings accounts.
1. Saving is important to millennials
A recent survey by PNC Investments showed that millennials take saving money seriously. Many millennials learned about saving from their parents and have held on to those values. So much so that PNC Investments says millennials are overly focused on saving. It wants to see them invest more in the stock market to build long-term wealth.
Our Picks for the Best High-Yield Savings Accounts of 2024
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Capital One 360 Performance Savings  APY 4.25% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Member FDIC. |
APY 4.25% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening. |
Min. to earn $0 |
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CIT Platinum Savings  APY 4.85% APY for balances of $5,000 or more Rate info 4.85% APY for balances of $5,000 or more; otherwise, 0.25% APY Min. to earn $100 to open account, $5,000 for max APY Member FDIC. |
APY 4.85% APY for balances of $5,000 or more Rate info 4.85% APY for balances of $5,000 or more; otherwise, 0.25% APY |
Min. to earn $100 to open account, $5,000 for max APY |
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American Express® High Yield Savings  APY 4.25% Rate info 4.25% annual percentage yield as of September 13, 2024 Min. to earn $0 Member FDIC. |
APY 4.25% Rate info 4.25% annual percentage yield as of September 13, 2024 |
Min. to earn $0 |
That’s backed up by 2017 research from Merrill Edge. It asked different age groups about what they’d rely on financially in 20 years’ time. Unlike other generations, 66% of millennials said they’d rely on their savings account.
Many millennials witnessed their parents and grandparents struggling during the Great Recession. As a result, they’re less willing to take risks — which makes the relative safety of savings accounts appealing.
You can earn APYs of over 5% right now on the best high-yield savings accounts. That’s an attractive proposition for a generation that’s both financially aware and risk-averse.
2. Millennials know how to find the best rates online
Millennials came of age as the internet was taking off, and they’ve consistently led older generations in terms of adoption of new technologies. ABA research shows millennials are most likely to use mobile and online tools to access their checking accounts and manage their money. Given online banks often offer the highest savings rates, it isn’t surprising that millennials are tech-savvy enough to jump on them.
Millennials are most likely to have a savings account that pays at least 4% APY. According to research from The Motley Fool Ascent, 43% of millennials have a high-yield savings account, which is the highest of any generation. It also shows the median transaction account balance for people aged 35 to 44 is $7,500.
Shopping around for the best savings account APYs can make a significant difference to your balance. According to the FDIC, the average savings account APY is 0.46. That’s a fraction of the rate you’ll get with top high-yield accounts. If you have $7,500 in savings, as some millennials do, that difference could translate to earning over $350 in a year.
A good proportion of millennials know how to get the most out of their savings by using high-yield accounts, often with online banks. This can boost their savings balances and help build financial stability.
3. Millennials have ambitious savings goals
Millennials have gotten a bad rap when it comes to saving, but that doesn’t mean they aren’t putting money aside. Over half the millennials and Gen Zers surveyed by the Travis Credit Union said they contribute to their savings monthly.
Indeed, another reason why millennials love high-yield savings accounts is because they’re busy saving toward different milestones. Some of the things they’re saving for include:
- Buying a home
- Retirement
- Travel
- Buying a car
- Education
- Weddings
Setting clear, achievable goals is the first step to reaching them. If you have multiple financial goals, it can help to use a separate savings account for each one, or an account that offers savings buckets. That makes it easier to track your progress, especially if you’re managing a mix of timelines.
Bottom line
No matter what your age or generation, there’s a lot to be said for savings accounts that pay rates of 4% or 5%. It’s great that so many millennials are using them to achieve their financial goals. And really, what’s not to love about a high-yield savings account?
