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If saving money is hard for you these days, you aren't alone. The personal savings rate—a measure of the percentage of disposable income Americans save—was just 4.1% in November 2023, according to the Bureau of Economic Analysis

Inflation and high household debt (including credit card debt) are two common barriers to saving for many. But saving even a small amount can have meaningful benefits, like helping you potentially earn more interest. The smartest ways to save money involve growing your cash reserves at a faster rate without putting your savings at risk. Here are three solid options to consider. 

High-Yield Savings Accounts

high rise building

Pexels

Traditional savings accounts are a popular place to store cash, but they aren't always the best places to earn interest on your savings. According to the Federal Deposit Insurance Corporation (FDIC), the average annual percentage yield (APY) on a savings account was 0.46% as of April 2024. Meanwhile, it's not uncommon to earn 4.00% or more with a high-yield savings account (HYSA). 

The best high-yield savings accounts not only offer higher interest rates to customers, they often feature other benefits as well. You may be able to find a HYSA from a bank or credit union that charges no monthly fees and has no minimum balance requirements. Other financial institutions may offer new bank bonuses you can earn when you open a new HYSA

Recommended High-Yield Savings Accounts

Bank Account APY Features Learn More
UFB Direct logo

UFB Direct Secure Savings Account

5.25% More Info

UFB Direct breaks balances into five tiers, but, currently, there is only one interest rate.

No minimum deposit
No monthly fee

SoFi Checking and Savings

0.50% - 4.60% More Info

Customers earn 4.60% APY on savings balances when they set up recurring monthly direct deposit of their paycheck or benefits provider via ACH deposit. Alternatively, deposit at least $5,000 each month to earn 4.60% APY on your savings balance. Checking balances earn 0.50% APY

No minimum deposit
No monthly fee

CIT Bank logo

CIT Bank Platinum Savings Account

5.05% More Info

Earn 5.05% APY on balances over $5,000. Balances of less than $5,000 earn 0.25% APY. Annual Percentage Yield is accurate as of July 27, 2023. Interest rates for the Platinum Savings account are variable and subject to change at any time without notice.

$100 minimum deposit
No monthly fee

CIT Bank logo

CIT Bank Savings Connect Account

4.65% More Info

Annual Percentage Yield is accurate as of July 27, 2023. Interest rates for the Savings Connect account are variable and subject to change at any time without notice.

$100 minimum deposit
No monthly fee

Money Market Accounts

stock market

iStock

Money market accounts are another type of deposit account with the potential to help your savings grow faster. The average APY on a money market account was 0.66% as of April 2024, per the FDIC. Yet the best money market accounts feature interest rates well above this level—potentially 4.00% or higher. 

On top of higher potential interest rates, the best online banks provide other valuable perks, like no monthly maintenance fees (or the ability to avoid them), no minimum balance requirements and daily compounding interest.

Money market accounts are like a hybrid between a savings account and a checking account, so you can often write checks and use debit cards for more convenient access to your funds.

Quontic Bank Money Market Account

Open Account

at Quontic

Quontic Bank's Money Market Account does a lot to keep things accessible to the average customer while maintaining one of the highest interest rates currently available. The $100 minimum opening deposit is on the low end for money market accounts, and you won't have to worry about monthly fees or overdraft charges.

Overview

Quontic Bank’s Money Market Account features a solid 5.00% APY for all balances, as well as no monthly fees and overdraft fees. The account also comes with other features, including bill pay, remote deposit, person-to-person transfers, check-writing privileges and even receipt tracking to help improve your money management.

Pros

  • Strong APY
  • No monthly fees
  • No overdraft fees
  • Low minimum opening balance

Cons

  • Excess transaction fees for every transaction over six per statement cycle

Certificates of Deposit

Certificates of deposit, better known as CDs, often offer some of the highest returns on savings you can find. At present, some of the best CD rates feature APYs over 5.00%.

That said, CDs do come with a trade-off in exchange for generous interest rates. When you invest your savings in CDs, you lock away your cash for a set period of time. It's possible to access your money early, but if you do so before your CD reaches maturity, you could face expensive early withdrawal penalties that chip away at your returns. 

The amount you can earn on a CD may vary based on several factors, and the bank you choose plays an important role in your financial returns. The type of CD you open also matters since each option below could have an impact on your earnings. 

CIT Bank Term Certificates of Deposit

Open CD

Member FDIC

  • Our Rating 3.5/5 How our ratings work Read the review
  • Minimum
    Deposit Required
    $1,000
  • 1 Year APY0.30% More Info

    Annual Percentage Yield is accurate as of April 2, 2024. Interest rates for CIT Bank's term CDs are variable and subject to change at any time without notice

  • 3 Year APY0.40% More Info

    Annual Percentage Yield is accurate as of April 2, 2024. Interest rates for CIT Bank's term CDs are variable and subject to change at any time without notice

  • 13-Month APY3.50% More Info

    Annual Percentage Yield is accurate as of April 2, 2024. Interest rates for CIT Bank's term CDs are variable and subject to change at any time without notice

Many banks that offer CDs require customers to commit to lengthy terms of several years or more in order to earn the highest interest rates available. However, with CIT Bank's term CDs, the opposite is true. To get the best rates at CIT, you'll need to open one of its shorter-term CDs, such as its 13-month CD that pays 3.50% APY. If you want an easy way to save more money without having to wait years, CIT Bank's term CDs are a solid option.

Overview

If you’re looking for a dependable way to earn interest on your money in the short term, CIT Bank’s certificates of deposits may be an excellent choice for you. However, those looking to open a long-term CD may be better off looking elsewhere.

Read the review

Pros

  • Strong rates for 13- and 18-month terms
  • FDIC insured

Cons

  • Rates for longer terms unimpressive

Risky Ways to Invest Your Savings

Bitcoin on a computer

Pexels

The options above are low-risk ways to grow your cash, but it's understandable that you might want to seek higher returns. In an effort to earn more, many people invest in stocks, bonds or mutual funds. Over the long term, a diversified investment portfolio in the stock market has provided historical annual returns of around 10% according to the U.S. Securities and Exchange Commission (SEC), but not every investor experiences average returns, and not every period in the market is average. There's a measure of risk when you invest your money in the stock market. 

Some investments, however, are considered high risk. These have the potential to help you earn big returns if all goes well, but there's a higher chance you could lose money too—perhaps every dollar you invest. Below are two common high-risk investments. Unless you have a high tolerance for unpredictability and potential loss of savings, you may want to steer clear of these riskier investment opportunities. 

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1. Cryptocurrency

Cryptocurrency enthusiasts believe digital currency, like Bitcoin and Ethereum, is the way of the future. Yet at present, investing in crypto assets can be tricky and unpredictable. Consider Bitcoin. The price of the popular cryptocurrency increased to over $68,000 back in November 2021. By the following November, Bitcoin had lost around 75% of its value and was worth around than $16,000. 

In addition to the frequent fluctuation in cryptocurrency value, the investment vehicle is still largely unregulated compared to other types of securities. This lack leaves the door open for bad actors to take advantage of unsuspecting investors. If you decide to invest in cryptocurrency, it's important to understand the risks involved.

2. Individual Stocks

As mentioned, a diversified investment in the stock market has provided investors with historical annual returns around 10%. There's no guarantee you'll experience the same type of return (or even that you won't lose money). But the SEC does note that diversification can improve the chances you won't lose money if the market drops—or at least reduce your losses compared to what you might have experienced if your investments weren't diversified. 

On the other hand, putting your savings toward stocks can be more dangerous. There's a much higher chance you could lose a large amount of savings (or even all of the money you invest). Trying to predict which stocks will win and outperform others is a gamble, and you should only consider putting money that you wouldn't mind possibly losing toward this strategy. 

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Bottom Line

Financial pressures are a reality for many of us. One potential way to reduce this pressure is to find ways to grow your savings this year. Yet it's important to understand the risks and rewards involved with savings and investing strategies and to choose the options that make the most sense for you. 

Whether you're working to build a recession-proof emergency fund or you're saving cash for something else, consider whether CDs, high-yield savings accounts or money market accounts could benefit you. Depending on your situation, a combination of these options might make more sense.

Recommended High-Yield Savings Accounts

Bank Account APY Features Learn More
UFB Direct logo

UFB Direct Secure Savings Account

5.25% More Info

UFB Direct breaks balances into five tiers, but, currently, there is only one interest rate.

No minimum deposit
No monthly fee

SoFi Checking and Savings

0.50% - 4.60% More Info

Customers earn 4.60% APY on savings balances when they set up recurring monthly direct deposit of their paycheck or benefits provider via ACH deposit. Alternatively, deposit at least $5,000 each month to earn 4.60% APY on your savings balance. Checking balances earn 0.50% APY

No minimum deposit
No monthly fee

CIT Bank logo

CIT Bank Platinum Savings Account

5.05% More Info

Earn 5.05% APY on balances over $5,000. Balances of less than $5,000 earn 0.25% APY. Annual Percentage Yield is accurate as of July 27, 2023. Interest rates for the Platinum Savings account are variable and subject to change at any time without notice.

$100 minimum deposit
No monthly fee

CIT Bank logo

CIT Bank Savings Connect Account

4.65% More Info

Annual Percentage Yield is accurate as of July 27, 2023. Interest rates for the Savings Connect account are variable and subject to change at any time without notice.

$100 minimum deposit
No monthly fee

ML

Michelle Lambright Black

Michelle Black is founder of CreditWriter.com and HerCreditMatters.com. Michelle is a leading credit card journalist with over a decade and a half of experience in the financial industry. She’s an expert on credit reporting, credit scoring, identity theft, budgeting, small business, and debt eradication. Michelle is also a certified credit expert witness and personal finance writer.