When it comes to savings, the interest rate you earn can make a big difference. The higher the rate, the more you can save in the short term and the longer it will take for your money to double in value. No matter how much or little you have in your savings account, these easy tips will help you find ways to increase your interest rate.
Savings Account Rates
Some banks offer a higher interest rate to people who have a high balance, but other banks only offer a standard rate. To find the best savings account for you, you might want to compare rates at different banks. You can also look into online banks that allow better rates for low balances.
Another option is to use your savings account as a way to earn more money instead of just saving money in it. For example, if you have extra money in your bank account, you could make an investment with part of it. This will grow your funds faster and might even bring in more interest than they currently are earning.
Finally, you could find ways to reduce the amount of money you spend each month. This will decrease the amount of money coming out of your account and help increase the amount going back into it through interest.
Moving Money to a CD
One way to increase your savings account interest rate is to purchase CDs. CDs are a safe investment that typically come with a higher interest rate than regular savings accounts.
CDs are short-term investments, averaging about six months or less in length. They offer a fixed return, meaning you know how much you will get back at the end of the term. A CD is also FDIC insured, which means its backed by the federal government.
CDs are not without their drawbacks, though. You can’t access your money while it’s in the CD, which means you have to plan ahead and make sure your emergency cash is in another account so you don’t run out of money if something unexpected happens. Additionally, if your CD includes a penalty for withdrawing before the end of the term it could affect how much money you end up getting back over time because most terms start accruing interest from day one.>>END>>
Asking for a Higher Interest Rate
One of the easiest ways to increase your savings account interest rate is by asking for a higher one. If you already have an account, this can be done easily by calling or visiting your bank or credit union. Talk to them about your financial goals and ask about opening up a new account with a higher interest rate. Make sure that you understand the terms before agreeing to it, as you may end up paying fees when transferring money from an existing account.