- Bank account interest rates have slowly increased since the Fed started raising interest rates.
- Some banks are raising savings rates faster than others, so you might earn more by switching.
- Buying savings bonds or building a CD ladder also might be worth considering.
Savings interest rates have slowly been going up in the last few months, and the Federal Reserve has continued to raise interest rates to address inflation.
If you’re ready to take charge of your savings and find ways to earn more interest on your money, here are five options to explore.
1. Ask your bank for an increase in your savings rate
While savings interest rates have tentatively increased in the last few months across various financial institutions, this doesn’t necessarily mean your savings account will see a sudden bump in its rate.
If your bank hasn’t made an announcement yet, Maggie Gomez, CFP® professional and owner of Money with Maggie, suggests asking your bank for an increase in the current rate you receive.
Gomez explains some financial institutions won’t immediately deliver a higher rate unless consumers get proactive.
“Later, to be more competitive, they’ll increase their rates more publicly, but I think it’ll be really slow,” Gomez adds.
2. Search online financial institutions for a high-yield savings account
According to the FDIC, the national average rate interest rate on savings accounts is 0.06% as of May 2022. However, several financial institutions pay much more than the national rate.
Jerel Butler, CFP® professional and founder of Millennial Financial Solutions, suggests looking at online financial institutions for competitive interest rates on savings accounts.
“It’s a little bit tricky with inflation going on,” Butler notes. “The best savings option for a typical savings account is an online savings account.”
Quick tip: Glimpse through our best online banks guides or best credit unions guide for options.
How to calculate interest on a savings account
If you’d like to see how much interest you’ll earn over time on a specific account, you can use our
compound interest
calculator to help you. By clicking on “More details,” you’ll get a breakdown of your initial investment, total contribution, and total interest earned.
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Source: https://www.businessinsider.com/personal-finance/how-to-earn-more-interest