Having money in your savings account earns you some interest on top of the available balance. Unfortunately, the interest earned may not be enough, especially during a recession. For example, when rates are lowered to enhance more spending and reduce the cost of borrowing money. In such cases, you will end up getting less money compared to the inflation rates. Thus you will notice that the cash tucked in your savings account will be losing the spending power. So if you want to make the most of your savings at lower risk, you can try out these strategies and see how they work for you.
Advance Bank Bonuses
A good number of banks offer bonuses to their new clients who meet all their requirements. For example, suppose you open a checking account to be listed for a bonus. In that case, you have to make several direct deposits and meet a certain minimum number of transactions during each monthly statement period.
If you have a savings account, it is much easier to earn bonuses since all you have to do is transfer the stated minimum amount to your account and let it stay there for some time. For example, a bank may be offering $400 of bonuses to its new clients who save up to $10,000 in three months. On top of the $400 bonus, you will also have your standard annual interest rate and your savings still intact. It will be some good money made without much effort.
If you opt for this method, go through the terms and conditions carefully. Some banks may penalize you if you close the account too soon after opening it by making you forfeit the bonus or placing other fines. Therefore you may lose money through such penalties.
Certificate Of Deposit
They are also known as fixed deposit accounts. These accounts earn more interest compared to regular savings accounts. They do not have any withdrawal flexibility once you decide to put your money in such an account; you will not have access to it until after a certain period. For example, if you set one year, you will have access to your money after a full year. If you withdraw the money before the period lapses, you will pay an early withdrawal fine.
The main benefit of such accounts is that you have a locked interest rate once you open a certificate of deposit account. It means that even when the market interest rates drop, your interest will remain the same. However, the downside is that if the interest rates rise, you will still earn the same, which may be lower.
The main features of this account are fixed interest rates and fixed terms. After the period ends, you can roll the money over to a new fixed term or withdraw it. If you decide to roll the money over to a new limited time, you have to wait for the term to end again to make a penalty-free withdrawal.
Switch To A Higher Interest-Earning Account
If your current savings account is not generating enough income, you can make a switch to a higher income-generating one. Online banks are the best place to look for high interest-earning accounts. These banks do not have to pay for space or have any structural maintenance costs. Therefore compared to traditional banks, they offer higher interest rates and seldom have any monthly charges. These monthly bank fees can eat up on the little interest that you have earned. You can also set automatic deposits to the account to build your savings by linking the savings account to your checking account.
Rewards Checking Account
Most banks are now offering reward checking accounts where you get cashback on debit card purchases; helping you earn high interest on your balance. In most cases, the account balance that will garner you interest is limited to a specific amount, and you have to meet some requirements to earn the bonus. Most banks will require you to complete the following;
- Sign up for electronic statements
- Make monthly debit purchases
- Receive several direct deposits and mobile checks deposits
- Spend on the bank’s credit card per month
A bank may offer an elevated interest rate of up to 4% on balances above $10,000 if you meet their stated requirements. Therefore if you opt for this method, ensure the huddles you are required to jump before getting the high interest are easy for you to go over. If you decide to open a reward checking account and you are unable to meet the requirements, you may end up earning lower interest compared to the ones you would have gotten in a savings account.
Earning a little more from your money has never been easier. If you have not figured out how to earn more interest on your money there are several options available. You can choose from the above mentioned strategies which one suits your financial needs and financial state well. Whichever method you choose to use, ensure you read through the fine print to ensure you do not enter into a wrong contract that may end up costing you your nest egg.