How to Maximize Savings Interest
If you’ve got some money set aside, there are several ways you can earn more interest and put your savings to work for you.
While high interest rates are not the best for those looking to borrow money, they can be beneficial if you’re trying to save more money this year. If you’ve got some money to set aside, there are a number of ways you can earn more interest and put your savings to work for you.
From a money market account to investing in the stock market, you can combat inflation or high interest loans by making more money from your savings.
What is a High Interest Savings Account?
A high interest bank account is similar to a
traditional savings account but has significantly higher interest rates. Some banks also offer high interest checking accounts that offer more interest than the industry averages for interest paid out on balances.
Even starting with a
simple savings account can help you maximize the interest you’re receiving. This is especially the case if you already keep more than the required minimum balance in your checking or savings account—and it might be a good time to consider switching to a high interest savings or checking account instead to help you earn more.
If you’re not currently earning interest on your checking account, consider switching to the
one account, an interest-bearing checking account with a number of other great benefits.
Money Market Savings Accounts
A money market account might be the best option for those who like to keep a high balance in their savings account. A
money market account is a high interest savings account that typically requires a much higher minimum balance than a traditional savings account.
These accounts also come with tiered interest rates that vary depending on your balance. You’ll have limited withdrawals available to you, but with recent updates to
Regulation D, some withdrawal restrictions have been lifted.
Money market accounts at FNBT offer unlimited deposits and in-person withdrawals, helping you manage your money better. You can also receive a free debit card for your FNBT money market account, giving you greater access to your savings funds when you need them.
Certificate of Deposit
A
certificate of deposit (CD) account is a fully insured, up to the FDIC limit, fixed-rate savings account that you hold for a set length of time, from 3 months to 5 years. Historically, the longer your term length, the better your interest rate will be, so if you’re looking for the best CD interest rates, you may want to consider longer options.
It’s important to know that you won’t be able to access these funds until your CD reaches maturity, or you’ll need to pay a penalty for accessing that money. If you know you won’t need that cash for a while, you can earn significantly more interest than even a high interest checking or savings account.
CD Ladders
If you’re looking to make the most of high interest CD accounts, a
CD ladder is one of the best approaches you can take. This is where you split your savings across multiple CDs with different term lengths, meaning that they’ll mature at different times, at which point you’ll have access to that money. From there, you can either withdraw the funds or reinvest that money into another CD.
For example, you could split a $200,000 investment into four separate CDs:
- $50,000 into a 1year CD
- $50,000 into a 2-year CD
- $50,000 into a 3-year CD
- $50,000 into a 4-year CD
The longest-term CD (4 years) will likely have the highest interest rate, but you’ll have access to the money you’ve invested each year as the CD terms end.
Brokered CDs
A
brokered CD account may be a good option if you’re looking for more than a standard CD. These are purchased on the secondary market through a brokerage but operate in a similar way to a traditional CD—you’ll invest a set amount of money for a fixed amount of time.
Brokered CDs may be bought and sold during their term length and aren’t typically offered through traditional financial institutions like banks. But FNBT offers brokered CDs through our Investment Services Team to help you maximize your savings.
Investing in the Stock Market
You could also consider
investing in the stock market, but this does come with risks. While the possibility for returns is always there, these funds are not FDIC-insured, and you could see significant losses if the market performs poorly.
It’s always best to consult with an
investment manager or
wealth advisor to determine your risk tolerance before putting money into the stock market. FNBT’s Wealth Management Group can help you set a risk tolerance and discuss your options, provided you have at least $250,000 in investible assets.
Maximize Your Savings Interest at First National Bank and Trust
When you’re looking to make your savings go further,
contact FNBT. Our team can help you earn more interest on your savings, no matter how much you have right now. Stop by any convenient location to see how we can support you and maximize your savings. We’ll help you find the right account to meet your current needs and savings style.
If you’re curious about investing, our investment executives will help you determine your investment style and develop an
investment portfolio tailored to you. Get in touch today.
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Securities and insurance products are offered through Cetera Investment Services LLC (doing insurance business in CA as CFG STC Insurance Agency LLC), member FINRA/SIPC. Advisory services are offered through Cetera Investment Advisers LLC. Neither firm is affiliated with the financial institution where investment services are offered. Investments are:
- Not FDIC/NCUSIF insured
- May lose value
- Not financial institution guaranteed
- Not a deposit
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