How to Start Getting More of a Return From Your Savings Accounts
Savings accounts are a safe and accessible place to stash cash for short-term goals. However, they typically yield very low-interest rates. Luckily, there are a few ways to get more of a return from your savings accounts. For starters, look for an account that offers compound interest.
Open a savings account
With interest rates low and inflation soaring, many people are looking for ways to maximize returns on their savings accounts. Fortunately, options are available for those willing to put in the time and effort.
You can find higher rates at online banks, credit unions, or regional institutions that don’t have brick-and-mortar branches. However, it’s essential to research each option before making a decision. You will also need to determine whether the account uses simple or compound interest to calculate your annual percentage yield (APY), which can significantly impact how much your savings grow over time.
Some banks offer teaser or promotional rates designed to draw in new customers. However, these rates are typically short-lived and can be challenging to keep up with. To get the best returns, choose an institution that offers a consistent, sustainable rate and compare its rates to others before selecting an account.
Make a higher deposit
Savings accounts provide a secure and low-risk option to store your money with minimal chances of losing it. They can help you cover expenses and provide stability during stock market downturns or economic events that may impact your income. With interest rates rising and inflation cooling, it’s an ideal time to start getting more of a return from your savings. And while banks aren’t all raising their rates the same amount, you can take advantage of this by shopping around for the best deal.
McBride says it’s also worth looking for the best online deals since many large national online banks currently pay 2.50 per cent or more on savings accounts.
Make a recurring deposit
With interest rates rising and the Federal Reserve indicating they might increase even faster than that, it’s time to consider where to park your cash. Savings accounts offer easy access to funds and safety, but they earn less than other investments. A recurring deposit account is an option that helps people make systematic savings by investing small amounts at regular intervals over some time.
If you’re interested in a high-yield savings account, compare the options available and find one that matches your needs and goals. Then, automate your savings by setting up automatic transfers online or using mobile apps to transfer funds from your checking into your savings account every week. The more you save, the more your money will grow. You might be surprised how quickly a little bit can add up!
Get a paper statement
A few minor changes can help you see the bigger picture of your finances and increase the returns on your savings. Compound interest, the Rule of 72, and attention to detail in reviewing financial institution documents are just some strategies you can employ to grow your money.
Most banks offer online banking options that allow you to view electronic bank statements for recent months at no cost. If you don’t have access to online banking or would prefer to receive paper statements in the mail, call your bank’s customer service line for assistance.
According to Deposit Accounts, many large national online banks are currently paying 2.00 per cent or more on new savings accounts and certificates of deposit. This website tracks depository banking products. In addition to the high rates, these accounts feature an attractive low minimum balance. This makes it easy to add to your savings. You can even set up automatic transfers from your checking to your savings account.