2 Ways Millennials Are Winning at Saving Money

I'm a millennial (part of the generation of Americans born between 1981 and 1996), and I'm tired. My generation is the best educated, but thanks to broader economic conditions and the way many of us had to pay for that higher education by borrowing money, our financial fortunes lag behind older generations. Pew Research found that our median household income is less than that of baby boomers' when they were our age.

Despite this, and despite the parade of media hot takes about how we've "killed" casual chain restaurants, diamonds, golf, and department stores, my generation is excelling at saving money. Research from The Motley Fool Motley Fool Money found that we are most likely to have a high-yield savings account (HYSA) paying at least 4% -- and most likely to have a dedicated emergency fund.

Let's take a closer look at millennial savings habits and see why they're worth imitating -- even if you're not one of us.

1. 43% of us have a savings account paying at least 4%

According to that research from The Motley Fool Motley Fool Money, millennials are the most likely generation to have a high-yield savings account -- 43% of us do. Generation Z is right behind at 39%.

Our Picks for the Best High-Yield Savings Accounts of 2024

Product	APY	Min. to Earn
American Express® High Yield Savings Member FDIC. APY 3.80% Rate info 3.80% annual percentage yield as of December 29, 2024. Terms apply. Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	3.80% Rate info 3.80% annual percentage yield as of December 29, 2024. Terms apply.	$0	Open Account for American Express® High Yield Savings On American Express's Secure Website.
Capital One 360 Performance Savings Member FDIC. APY 3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening.	$0	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.
Western Alliance Bank High-Yield Savings Premier Member FDIC. APY 4.46% Rate info The annual percentage yield (APY) is accurate as of November 7, 2024 and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY. Min. to earn $500 to open, $0.01 for max APY Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website. Member FDIC.	4.46% Rate info The annual percentage yield (APY) is accurate as of November 7, 2024 and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.	$500 to open, $0.01 for max APY	Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website.

The reason so many of us have a savings account paying a high rate of interest is likely because we are very comfortable with online banking and money management. Online banks can offer the highest APYs on savings accounts because they have minimal overhead costs -- unlike traditional banks, online banks have no branches to maintain.

What we give up in being able to stroll into a bank and get in-person help, we get back in the form of a higher interest rate and online banking tools that are easy to use, like mobile apps.

If you've never had an online bank account before, I urge you to explore your options. The best online banks are subject to the same FDIC insurance as the traditional banks, so your money is safe in one, up to $250,000 per depositor, per FDIC-insured bank, per ownership category.

2. 47% of us have dedicated emergency savings

Perhaps it's thanks to the fact that millennials have lived through the implosion of the dot-com bubble, the Great Recession, and the COVID-19 pandemic, but millennials are more likely to have an emergency fund than other generations. We've learned that it's a darn good idea to have dedicated savings for coping with unplanned expenses -- because they always pop up.

Nearly half (47%) of us have savings specifically set aside for emergencies, and you can bet that a lot of us keep those savings in a high-yield savings account. One potential pitfall of using an online HYSA for emergency savings is that getting access to your money can involve jumping through a few extra hoops.

Most online HYSAs don't come with ATM or debit cards. But thankfully, with a little planning ahead or a few strategic moves, you can make an online HYSA work for your emergency savings.

I opened a checking account that's linked to my high-yield savings account. To get access to my savings, I only need to use my bank's website or mobile app to transfer cash (which happens instantly), and then I can take it out at an ATM or use my debit card. You can also use ACH or a payments app to transfer money from your HYSA to an outside bank account and get access that way.

Millennials get a ton of flack in the media for our supposed addiction to avocado toast and for not necessarily living our lives according to the societally approved "life script" (because who can afford the big house with the white picket fence and the 2.5 kids?). But when it comes to saving for emergencies and using the best-paying savings accounts, we're second to none.