The Best Places to Save Money and Earn Interest 2024

Similar to a standard savings account, a high-yield savings account offers higher interest rates. To qualify for a better interest rate, some banks and credit unions demand a larger starting deposit. The lowest minimum deposit requirements are typically found in the top high-yield savings accounts. Based on information provided by the Federal Deposit Insurance Corporation (FDIC), these accounts have the potential to pay ten times or more than the average savings account interest in the country, which as of April 17, 2023, is 0.39%.

How To Open a High-Yield Savings Account

Many credit unions and banks offer high-yield savings accounts. Along with your account application, you’ll need to submit identification and, if necessary, make an opening deposit.

2. High-Yield Checking Account

If you want to earn interest on your savings while having almost instantaneous and limitless access to your money, a high-yield checking account can be a good option. Checking accounts typically have the ability to write checks or issue debit cards, unlike savings accounts. Furthermore, there are no limits on how many transactions you can conduct with a checking account throughout a statement cycle.

If you’re saving for a trip or a new appliance, these accounts might be a good fit. They let you spend quickly whenever you need to and earn interest on your balance. You may use your debit card to take advantage of sales when they happen, for example.

What Is a High-Yield Checking Account?

Regular checking accounts function similarly to high-yield checking accounts, except they also accrue interest. You’ll frequently need to fulfill monthly conditions, like as making a particular number of direct deposits, in order to qualify for the interest rate.

According to FDIC data, the best high-yield checking accounts have rates that are significantly greater than the 0.06% national average for interest-bearing checking accounts. Certain accounts have an opening deposit requirement, while others do not.

How Do You Open a High-Yield Checking Account?

You can fill out a straightforward account application, present identification, and make an opening deposit (if necessary) once you’ve located a bank or credit union that offers the rate and requirements that suit your needs.

3. CDs and CD Ladders

Certificates of deposit (CDs) and CD ladders can help you take advantage of favorable rates if you’re saving for a financial goal, particularly in an environment where interest rates are rising.

What Is a CD?

Time deposit accounts known as certificates of deposit (or CDs) have fixed interest rates for predetermined lengths of time. These savings accounts are offered by credit unions and banks.

How Do You Open a CD and Build a CD Ladder?

Purchasing CDs of varying maturities allows your CDs to age on a regular basis. This is known as a CD ladder. You will have a three-rung CD ladder with CDs maturing every three months, for instance, if you purchase CDs with maturities of three, six, and nine months. You may access your funds with predictability thanks to the regular maturity schedule, which also helps you avoid the potentially expensive early withdrawal fees on CDs.

You can reinvest the money from aged CDs in your ladder into new CDs that offer better interest rates. By doing this, you can increase the return you receive on your savings and take advantage of greater interest rates when they become available.

Investigate the best CD rates and select CDs that give the greatest rates for the terms you want to include in your ladder before opening CDs and creating a CD ladder.

4. Money Market Account

If you want more yields than you would get from a standard savings or checking account but still want convenient features like check writing ability and a debit card, you might want to think about opening a money market account.

What Is a Money Market Account?

Some of the best features of checking and savings accounts are combined in a money market account. These accounts usually allow for check writing and debit, and they also pay interest. Similar to savings accounts, money market account withdrawals are frequently restricted to six per month by banks and credit unions.

How Do You Open a Money Market Account?

Banks and credit unions both provide money market accounts. Selecting a money market account might be a personal decision, as the finest ones give returns that are on par with high-yield savings and checking accounts. Make sure to evaluate the features offered by each money market account you are thinking about, as these can differ depending on the institution and not all of them will be suitable for your savings objectives.

5. Treasury Bills

Deposit accounts in banks and credit unions are typically protected for up to $250,000 per depositor, per account by the National Credit Union Administration (NCUA) in credit unions and the Federal Deposit Insurance Corporation in banks. Treasury notes (T-bills) are another kind of savings instrument that provides protection if you need to save more than that.

What Are Treasury Bills?

The United States government issues T-bills, which are short-term debt instruments having maturities ranging from a few days to 52 weeks. Even though rewards may not be as high as those of a standard high-yield savings account, they are still secure investments since they are backed by the full faith and credit of the United States government. You exchange security for a reduced interest rate when you purchase T-bills.

You can earn interest and temporarily store cash with T-bills. T-bills can be sold before they mature or kept until they do. T-bills are quite liquid since there is a sizable secondary market if you need to access the money you have in them.

How Do You Buy Treasury Bills?

Treasury notes can be purchased via secondary markets, such brokers, or through Treasury Direct.

6. Series I Savings Bonds

The combination of fixed and variable returns provided by Series I bonds helps to preserve the purchasing power of your funds. For the duration of the bond, investors receive a fixed rate, and every six months, the variable rate is adjusted to reflect inflation. Based on shifts in the consumer price index for all urban customers, the variable rate is determined.

What Are Series I Savings Bonds?

U.S. government-backed debt instruments known as Series I bonds can shield your investments from inflation. For thirty years, or until you redeem them first, interest is earned on I bonds. Monthly interest is accumulated and compounded every six months. I bonds can be purchased for as little as $25, and the maximum amount per individual per calendar year is $10,000.

Series I bonds do not have a secondary market, thus you are unable to resell them. Series I bonds can be paid in after one year, with a 30-year final maturity. You forfeit three months of interest if you redeem the bond after the first year but before the five-year period.

How To Buy Series I Savings Bonds

Paper bonds can be purchased with your IRS tax return, or you can purchase electronic Series I bonds through Treasury Direct.