How to make the most of your savings account

There are small and simple steps you could take today to maximize your savings account and grow your rainy-day fund to help cover unexpected expenses. 

Think this doesn’t apply to you? Well, according to Bankrate neither did 41 percent of Americans who were forced to dip into their savings account to pay an unexpected bill in 2019. The same report, the Financial Security Index published in January 2020, said that 28 percent had to borrow money in order to cover an average of $3,518 in unexpected expenses last year alone.

Here are a few ways you can start saving more today:

Switch To High-Yield Savings

Most regular bank savings accounts collect very little interest over the course of a year – and that’s if you are able to go a whole year without withdrawing any of the money you’ve deposited. In 2017, it was noted that interest rates were at a 5,000 year low. Yes, you read that correctly. And no, it hasn’t gotten any better since then.

One simple change to make and maximize your saving efforts would be to find a high-yield savings account. Most of these accounts are online-only banks so be sure that they are FDIC insured (and for those credit union accounts, check for the NCUA insured seal).

This simple change from a typical savings account to a high-yield savings account could increase your savings every year. For example, if you kept $10,000 in a traditional bank savings account and earned 0.06 percent you could afford a cheap cup of coffee after taxes. In a high-yield account, you might earn $100 for that same amount by earning 1 percent or more. Do your research before committing to a high-yield savings account.


Just like the CDs collecting dust in your closet, this CD (Certificate of Deposit) is a long-term savings effort. If you don’t need to access your money immediately, then a CD might be a savings solution for you.

Unlike a traditional or high-yield savings account, you deposit money in a CD and aren’t allowed to withdraw for a certain time period, called a term. The term amount varies but, typically, the longer you invest your money, the higher rate of return on the investment. The major benefit of CD is that you lock in the interest rate at the time of deposit, so even if the market fluctuates, you’ll continue to earn that rate of interest until the term is over.

You can also build a CD ladder. A CD ladder is multiple CDs, each with their own term and maturation dates. This would allow you to access portions of your money throughout the year if you needed to instead of locking the entire amount into one account. You might be able to increase your return on investment by building a ladder because you’ll have multiple accounts with different interest rates. 

Check out current interest rates for different CDs if this is the option for you.

Rack Up The Rewards With A Checking Account

Banks have been known to offer rewards programs to entice people to use their checking accounts. These rewards accounts can be high-interest, but usually require you overcome a few obstacles before reaping the benefits. 

Each program has its own rules but many rewards checking accounts allow customers to receive the high-interest return for using their debit card, maintaining a set balance and setting up automatic deposits. If you decide to try one of these accounts, be sure to read the fine print and that you will meet all the requirements to actually get the rewards.

Credit Unions

Unlike a bank, a credit union is owned by the members who invest their money in the institution. This can mean lower fees, higher interest rates and better additional perks. 

You can go through a credit union to create your CD ladder or find a high-yield savings account too. So be sure to shop around. 

Other Tactics

Now that you have a better idea on where to put your money to earn more interest, here are a few ideas on how to actually have the money to set aside:

  • Track your spending and identify ways to save. 
  • If you pay off a credit card or reduce bills, take the extra money you would have put towards those bills and put it into a savings account instead.
  • Call your providers (cell phone, cable, insurance company and credit card companies) and ask how you can save. Maybe you’re paying extra for a service you no longer need or want or you can save by bundling certain insurance coverages together or reducing interest rates. 
  • Set a budget and stop impulse buying. Use the 30-day rule when making large purchases.

When it comes to saving money, there’s no one size fits all solution. So be sure to do your research before making any decisions on where to put your money.


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