Your money should be making you money. How does that happen? By taking advantage of high-interest rates. Here are some ways that you can put your money to work for you.
Try a Certificate of Deposit
One way to save with interest is through a certificate of deposit (CD). The upside of a CD is that they usually offer higher interest rates than savings accounts. The downside is that once you purchase a CD, you are locked into that interest rate and are unable to withdraw the money until the CD term expires. Well, you can withdraw early, but you’ll get hit with a fee. As for that interest rate, it’s great if you lock in with a high-interest rate and rates go down. It’s not as great if you lock in at a low rate and rates go up.
Check Credit Unions
Credit unions often have savings accounts that feature higher interest rates than big banks. If you don’t live near one, check online and chances are you’ll find a credit union that will offer you membership.
You can usually find a high-yield savings account, you just have to shop around. Aside from credit unions, check into online banks. They also usually offer savings accounts with higher interest rates than big banks. And remember, a small difference in the interest rate will add up.
For example, if you have $1,000 in a savings account that only offers .75 percent interest per year and you don’t save anymore, you’d have $1,007.50 at the end of one year. However, if you do the same with an account featuring a 4.00 percent interest rate, you’d have $1,040.00 saved after one year. Considering you’ll likely be saving as you go, that interest rate difference is huge.