Top Hacks for Getting the Most Out of Your HYSA as a College-Bound Teen

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Traditional savings accounts, to put it lightly, tend to offer a paltry interest rate. Really, they're just there to act as a virtual piggy bank, holding that cash until you need it, rather than offering perks. Luckily, there is something better: High-yield savings accounts (HYSAs). These offer much higher APYs than traditional savings accounts, as long as you meet the requirements.

If you're looking for a way to maximize your savings with a HYSA, here are the top hacks to employ as an incoming college student.

Shop around for HYSAs

If there's one universal truth about banking products, it's this: You have to shop around to get the best deal. That's because every bank that offers a HYSA will have their own requirements to get that elevated APY, and some may offer more perks than others. So it's important to understand exactly what you're getting out of the deal before signing up.

You should look closely at the requirements portion, since it will dictate the rate you're eligible for. As an example, one bank might require you to have at least $100 to open the account, while another might require a $300 direct deposit each month to actually get the high rate that's often presented as a perk of these accounts. Make sure you can qualify for the higher APY, and that there aren't fees that will eat into your cash, then consider any other offered perks to narrow down your account search.

Keep the HYSA with a different bank

Assuming you already have a checking account, you should consider keeping that cash and your savings in separate banks. This will make it just a bit less convenient to access that saved money, allowing it to grow. For example, using two different banks might require you to initiate an online transfer that will take a day or two to go through, which can give you more time to make important spending decisions. So if you're just getting started with managing money and you're worried about handling it responsibly, this can be useful.

Of course, expenses may come up that necessitate withdrawing money from your high-yield savings account, so you'll want to consider that when figuring out how much to put away into savings, versus how much to keep in your checking account as an immediate buffer.

Make a plan for that cash

Saving money is always a good idea, especially when you're earning a high interest rate. But you need to have a clear vision for how you'll use it if you want to make the most of it, and stay motivated. Typically, it's best to create an emergency fund that you can tap into if something urgent and necessary comes up. (Think: A hospital visit, a car repair, or weathering a job loss.) In general, it's best to aim for at least three to six months' worth of necessary expenses. So if you need $500 a month to ensure that your needs are met, you'd want a $1,500 to $3,000 emergency fund.

Keep in mind that this is meant to be a long-term goal. And you should expect that your emergency fund balance will fluctuate over time, because life can get unexpectedly expensive.

But you may also have financial goals that you want to save for along the way. In that case, be sure to figure out exactly how much each goal will cost, and divide that by your timeline to figure out how much money to put toward that goal each month.

Embrace automatic transfers

Even if you have a variable income, auto transfers can be a fantastic way to ingrain the habit of saving money. And that's a habit that you'll need for the rest of your life -- take it from someone who lived on credit cards all through college, and paid for it for years after. Because the money is going to your savings account automatically, you don't have to worry about making the decision to save every single month. (Plus, this may even be part of the requirement to get that higher rate.)

The key here is selecting the amount you can realistically afford to automatically transfer from your usual account. That means you'll have to take a close look at your budget to see how much wiggle room there is, and if you need to make any changes to your spending habits to make it work. Even if you can only swing a $25 monthly transfer, that's going to be much better than skipping it. And remember: You can always adjust it to match your needs later on.

A high-yield savings account can be a great financial tool, especially for future college students. As long as you make sure that your money has been given a purpose and the opportunity to grow, you'll be setting yourself up for long-term success.

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