Are you looking to make your money work for you? Saving your hard-earned dollars in a bank account is an excellent way to start growing the funds you’ve already accumulated. Adding even more value over time can be within reach with some techniques and insight.
Aside from spending extra money each month, there are other ways to grow what’s already in your savings or checking accounts—no matter how much is initially stored away. So if you’re interested in exploring new avenues of financial increase, here are seven ways to grow your money in the bank.
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Switch to a High-Yield Savings Account
Online banks are becoming the norm due to their accessibility and convenience. And they offer high-interest rates for their savings account since they don’t charge monthly fees. Why? Because they need a land-based branch to open up and maintain. It’s also one of the reasons why they offer higher interest rates than traditional banks.
It’s worth noting that traditional banks still have a high annual percentage yield or APY. It’s best to shop around and check out the savings accounts available for you to generate income while it’s sitting in the bank.
Consider Opening a Certificate of Deposit
Another option to consider is a certificate of deposit of CD. What makes it different from the usual savings account is that it holds your money for a fixed amount of time, such as six months, a year, or more, for a fixed interest rate. So when you get those big checks, a CD is an excellent choice.
Let’s say you won oversized checks from an event and want to save the money and not be tempted to use it. Setting up a certificate of deposit should be one of your lists. After a set amount of time, you can withdraw your money plus the interest rate the bank is paying you. So choosing the best bank with a great interest rate for their CDs is essential.
Build a CD Ladder
Once you’re confident with the benefits of a certificate of deposit, you may want to build a CD ladder. It’s when you open multiple CD accounts to take advantage of the higher interest rates. These have staggered maturity dates, and it’s a tremendous money-growing strategy if you have extra cash in your savings account.
Other benefits of a CD Ladder:
- An increase in liquidity
- Earn more money after the maturity date
You can set them up to mature after a year, with one account reaching its maturity date each month. However, it depends on your flexibility since you must pay for early withdrawals in case you need the money before its maturity date.
Learn More About Bank Bonuses
Banks offer introductory bank bonuses to people who open new accounts. These bonuses are enough to entice you to open an account with them, but you’ll have to meet a few requirements to be applicable. Not only do banks offer these, but credit unions do as well. Most of the time, the banks will ask you to deposit a minimum amount and keep it there for a certain amount.
For instance, the bank offers $500 with a minimum deposit of $15,000. It means you earn about 3.3% interest, equivalent to most banks’ 3% high-yield savings accounts. But before anything else, make sure to read the fine print to avoid any issues in the future.
Open a Rewards Checking Account
A reward checking account is when you open and maintain specific requirements. These rewards can be in the form of cash bonuses, cash backs, or a high APY. However, you may have to overcome different obstacles to earn the bonus rates.
Other benefits rewards checking account:
- High annual percentage rates
- Cash backs
- ATM refunds
- Airline miles
Before opening a rewards checking account, ensure the requirements are easy to meet. Sometimes, they’ll ask you to make a minimum purchase of $1,000 a month using the bank’s credit card, make ten debit card purchases per month, etc.
Take Advantage of a Money Market Account
A money market account is an interest-bearing account with features of both a savings account and a checking account. Sometimes, they pay higher rates than a higher-yield savings account, which is what you should look out for. At the same time, they give check-writing privileges and a debit card for withdrawals.
It’s ideal for short-term withdrawals but gives you the advantage of earning interest on your balance. But keep in mind that these interest rates may also fluctuate and vary since it rises and falls based on market conditions.
If you’re okay with taking some risk, consider purchasing bonds. It’s like you’re making a loan on the bank or institute that issues it. Once the bond matures, you can withdraw the money plus the interest rate. Fortunately, you can choose from many bonds, such as those sold by major companies.
Other benefits of bonds:
- Preserve capital while investing
- Predictable income stream
- Protect against inflation
But, you must also be mindful of market movements because rates might fall if the market rate rises. Consequently, if you sell it to someone else before it matures, you can get less than you paid. Although they are not as hazardous as stocks, they are an excellent way to boost your money while taking a small risk.
Follow These Money-Growing Tips to Increase Your Savings
If you want to increase your savings without taking risks, the tips above are enough to help you out in the long run. Make sure to choose which is best according to your current situation. You should also remember that it takes time to grow your savings, so start now and reap the rewards in the future!