HYSA Rate History 2020-2026 - Why MYGAs Lock the Rate
Quick take: HYSA rates whipsawed in the past 6 years: 1.80% in 2019, 0.50% by mid-2021, back to 5.00% in 2023, sitting at ~4.25% in mid-2026. The Fed drove every move. The pattern: every easing cycle since 2007 has cut HYSA yields by 200-400 bps within 12-24 months. For 3+ year money, MYGAs lock the rate contractually.
Year-by-year HYSA rates (representative cross-section)
Mid-year snapshots of three benchmark HYSAs: Marcus (Goldman Sachs Bank), Ally Online Savings, Synchrony High Yield. Indicative; actual rates moved within each year.
| Year | Fed funds | Marcus | Ally | Synchrony |
|---|---|---|---|---|
| 2020 (mid) | 0.25% | 1.05% | 1.10% | 1.10% |
| 2020 (end) | 0.25% | 0.50% | 0.60% | 0.60% |
| 2021 (mid) | 0.25% | 0.50% | 0.50% | 0.50% |
| 2021 (end) | 0.25% | 0.50% | 0.50% | 0.50% |
| 2022 (mid) | 1.75% | 1.20% | 1.25% | 1.50% |
| 2022 (end) | 4.50% | 3.30% | 3.30% | 3.75% |
| 2023 (mid) | 5.25% | 4.30% | 4.25% | 4.75% |
| 2023 (end) | 5.50% | 4.40% | 4.35% | 4.85% |
| 2024 (mid) | 5.50% | 4.40% | 4.40% | 4.65% |
| 2024 (end) | 4.75% | 4.30% | 4.20% | 4.50% |
| 2025 (mid) | 4.50% | 4.40% | 4.35% | 4.45% |
| 2025 (end) | 4.25% | 4.30% | 4.25% | 4.40% |
| 2026 (now) | 4.00% | 4.25% | 4.20% | 4.35% |
The Fed cycle, in plain English
2020-2021: COVID emergency cuts
Fed slashed from 1.75% to 0.25% in March 2020. HYSA rates collapsed by ~70% within 12 months. Marcus went 1.55% → 0.50%. Ally went 1.60% → 0.60%. The drop was painful for savers who'd just opened HYSAs at the 2019 peak.
2022-2023: Inflation-fighting hike cycle
Fed hiked from 0.25% to 5.50% over 18 months - the fastest hike cycle since the early 1980s. HYSA rates roared back, hitting 4.40-5.25% by mid-2023. Savers who'd parked money at the 0.50% bottom finally got real yield - if they remembered to move it.
2024-2026: The plateau, then easing
Fed held at 5.50% through mid-2024, then began cutting. As of June 2026, Fed funds is 4.00% and HYSAs are 4.10-4.55% - already 30-70 bps below the 2023 peak. Further cuts are expected; HYSA rates will follow.
The full Fed cycle, 1995-2026 (broader pattern)
| Period | Fed funds range | HYSA range (approx) |
|---|---|---|
| 1995-2000 boom | 4.75-6.50% | 4.00-5.50% |
| 2001-2003 cuts | 1.00-6.50% | 0.75-5.50% |
| 2004-2007 hike cycle | 1.00-5.25% | 0.75-5.30% |
| 2008-2015 zero-rate | 0.00-0.25% | 0.50-1.20% |
| 2015-2018 normalization | 0.25-2.50% | 0.75-2.30% |
| 2019 mini-cuts | 2.50-1.75% | 2.30-1.60% |
| 2020-2021 COVID | 0.00-0.25% | 0.50-1.05% |
| 2022-2023 hike | 0.25-5.50% | 1.20-5.25% |
| 2024-2026 easing | 5.50-4.00% | 4.10-4.85% |
The lesson: HYSA rates are loaned, not owned
You don't own a HYSA rate. The bank pays whatever they choose to pay, within posted disclosures, and changes it whenever the market moves. The 4.25% you see today is a snapshot, not a contract.
Compare with a MYGA, where the rate is contractually fixed for the full term. A 5-yr MYGA at 5.65% pays 5.65% in year 5 regardless of what the Fed does. The carrier takes the rate risk; you keep the rate.
Why this matters for your decision today (mid-2026)
The Fed has begun easing. Historical patterns suggest 100-200 bps more cuts over the next 12-24 months. If that happens, HYSA rates will likely drop to 2.50-3.50% range by 2027-2028.
A saver who locks a 5-yr MYGA at 5.65% today is buying insurance against that scenario. Two outcomes:
- Rates drop as expected: MYGA wins by 200-400 bps over the next 5 years - $25-$50K on $250K, more on larger balances.
- Rates stay flat or rise: MYGA still wins on tax deferral (~80 bps after-tax pickup at high brackets) AND avoids rate-shopping friction for 5 years.
The MYGA wins in both scenarios. It just wins by more when the Fed cuts.
What savers got wrong in 2020-2021
Many savers in 2019 sat in 1.80% HYSAs thinking "rates can't drop much." Then COVID hit. By late 2020, those same accounts paid 0.50%. Savers who had locked 5-yr MYGAs at 3.50% in late 2019 were sitting on a 300 bp advantage that lasted until 2023.
The current cycle has the same setup. HYSAs at 4.25%. 5-yr MYGAs at 5.65%. Fed easing in progress. The savers who lock now are positioning for the same kind of multi-year advantage if the cycle plays out as it has historically.
What if rates DON'T drop?
If the Fed holds at 4.00% or hikes again, HYSAs stay competitive. The MYGA buyer gives up some upside flexibility (couldn't capture a 5.50% HYSA in year 3 if it happens). But:
- The MYGA's tax deferral still adds 50-80 bps net at high brackets
- The 5.65% MYGA rate is still 110-140 bps above today's HYSA
- The MYGA buyer is not worse off; just less ahead
This is asymmetric: locking benefits more if rates drop than it costs if rates rise.
Related research
- HYSA vs MYGA - the full side-by-side
- Best HYSA Rates 2026
- The 5-Year MYGA
- CD vs MYGA
Bottom line
HYSA rates have ranged from 0.40% to 5.25% over the past 6 years. The Fed drives every move. For emergency funds and short-term cash, that variability is acceptable - you weren't trying to lock a multi-year rate anyway. For 3+ year money, the variability is the problem. A MYGA at 5.65% locked for 5 years removes the variability and historically outperforms holding a variable HYSA through an easing cycle by a wide margin. The math favors locking when the Fed begins to ease - which is now.
About Hans Goldstein: Independent retirement income specialist. CA Life License #4163961. NPN #20602398. Reviews 30+ annuity carriers and the leading bank HYSAs. Hans does NOT earn commission on HYSAs or CDs - these reviews are written for the same risk-averse savers who often end up as MYGA buyers when they need 3+ year money. Phone: 213-414-2808. Email: hans@goldsteinco.net.
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Disclosure
This review reflects publicly available product materials and approximate rates as of the date stated above. HYSA APYs are variable and change frequently - confirm current values directly with the bank before opening an account. FDIC insurance covers up to $250,000 per depositor, per insured bank, per ownership category. MYGA rates referenced are illustrative top-of-market quotes as of 2026 and depend on state, carrier appointment, and product approval; not all MYGAs are available in every state. This article is general information for educational purposes; it is not a personalized recommendation, solicitation, or offer of any specific product. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated carriers across the annuity market; Hans is not a banking representative and does not earn compensation on HYSA or CD products. Tax discussion reflects federal law as of 2026 and is subject to change. State tax treatment varies. Always read the actual bank disclosure and consult a licensed advisor or CPA before reallocating retirement-bound funds.