Saving money gives you incredible financial power, including the ability to fund future goals and weather life’s unexpected events. But figuring out where to save your money can be challenging, especially with a seemingly endless array of options.

The ideal place to save money comes down to a combination of factors. Generally, though, these are interest-earning accounts where there’s little or no risk of losing money. We’re talking about the safest places to store your savings, not the most lucrative.

Inflation currently outpaces any yield you can hope to earn at a bank or credit union. To maintain your money’s buying power, you’ll need to be comfortable with risk—i.e., investing in stocks.

Still, if your goal is to grow your savings with little risk, here are five places you can safely save money and earn a little interest.

Where To Put Your Savings

Before opening an account for your savings, ask yourself a couple of questions:

  • What am I saving for?
  • When might I need this money?

For example, say you’re building your emergency fund and may need your funds on short notice. You’ll want to keep your money in an account where it’s easy to access and where you won’t be penalized for making a withdrawal. You may trade a higher rate for more liquidity in this case.

On the other hand, if you’re saving for a down payment on a house and know you won’t be buying a home anytime in the near future, you may consider an account with less liquidity and a higher interest rate.

You may also choose to have multiple savings accounts for different goals. Your savings strategy is yours to design. The following ideas can help you make a plan to save and maximize your interest earnings.

Best Places To Save Money

1. High-Yield Savings Account

high-yield savings account is a good choice if you want to make sure your savings are somewhat accessible while earning interest. Many, if not most, savings accounts limit the number of transactions and withdrawals you can make per month to six. But in exchange for less liquidity, you typically get a higher interest rate than you can earn with checking accounts.

What Is a High-Yield Savings Account?

A high-yield savings account operates like a regular savings account, but the interest yields are generally higher. Some banks and credit unions require a higher opening deposit to get a higher interest rate. The best high-yield savings accounts usually have a low minimum deposit requirement. These accounts can pay 10 times or more than the national average savings account rate, which is 0.39% as of April 17, 2023, according to data from the Federal Deposit Insurance Corporation (FDIC).

How To Open a High-Yield Savings Account

High-yield savings accounts are available at many banks and credit unions. You’ll need to provide identification with your account application and make an opening deposit if required.

2. High-Yield Checking Account

high-yield checking account could be an attractive place for your savings, especially if you want near-instant and unlimited access to your funds while earning interest. Unlike a savings account, checking accounts generally come with a debit card or check-writing capabilities. Checking accounts have no restrictions on the number of transactions you can make within a statement cycle.

These can be good accounts if you’re saving for short-term goals, like a vacation or a new appliance. They allow you to earn interest on your balance and quickly spend whenever you need to, allowing you, for example, to swipe your debit card and take advantage of a sale when it comes along.

What Is a High-Yield Checking Account?

High-yield checking accounts operate like regular checking accounts but with interest earnings. To earn the interest rate, you’ll often have to meet monthly requirements, like making direct deposits of a certain amount.

The best high-yield checking accounts offer rates far higher than the national average of interest-bearing checking accounts, which is 0.06%, according to data from the FDIC. While some accounts require a minimum deposit to open, others don’t.

How Do You Open a High-Yield Checking Account?

Once you find a bank or credit union offering the rate and opening deposit requirements that fit your needs, you can complete a simple account application, provide identification, and make an opening deposit (if required).

3. CDs and CD Ladders

If you’re saving for a financial goal, certificates of deposit (CDs) and CD ladders can help you take advantage of favorable rates, especially in a rising interest rate environment.

What Is a CD?

Certificates of deposit (CDs) are time deposit accounts that pay a fixed interest rate for a fixed period. You can find these savings accounts at banks and credit unions.

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

A CD ladder involves buying CDs of different maturities so that your CDs mature regularly. For example, if you buy CDs with maturities of three months, six months, and nine months, you’ll have a three-rung CD ladder with CDs maturing every three months. The regular maturity schedule gives you predictable access to your savings and helps avoid early withdrawal penalties on CDs, which can be hefty.

As CDs in your ladder mature, you can reinvest those funds into a new CD at a higher interest rate. This practice helps you take advantage of higher interest rates as they become available and earn more interest on your savings.

To open CDs and build a CD ladder, research the best CD rates and choose CDs that offer the best rates for the terms you want to include in your ladder.

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