4 Ways to Earn More Interest on Your Money

Reap a higher return by stashing your cash in a high-yield savings or checking account, a CD ladder or a credit union.

Spencer TierneyDecember 11, 2019
Young woman with her dark hair pulled back works at a laptop with paperwork on her desk.

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own.

When earning interest, your choice of bank account matters more than you might think. With the right account, you can earn $100 or more a year. Here are four ways to get there.

Summary: 4 ways to earn more interest

  1. Open a high-interest online savings account.

  2. Switch to a checking account with a high yield.

  3. Build a CD ladder.

  4. Join a credit union.

1. Open a high-interest online savings account

You don’t have to settle for cents of interest that you may get from a traditional brick-and-mortar bank’s regular savings account. Many online banks offer high-yield savings accounts with no monthly fees.

Making $100 in a year: Keeping $6,000 in an account that earns 1.75% annual percentage yield, which is the interest rate when factoring compounding, can earn you a little over $100 in one year. Compare that with the $5 you would get from a regular savings account earning the national average rate of 0.05% APY.

Compare three online savings options below, or see our list of the best high yield online savings accounts.

2. Switch to a high-yield checking account

Some checking accounts have high rates, with some hoops. You can find a handful of checking rates between 1% and 2%, but you might have to qualify with several requirements such as direct deposit and making close to a dozen debit card transactions a month.

» Ready to browse options? Take a look at NerdWallet's Best Checking Accounts

3. Build a CD ladder

With a “CD ladder,” divide up the money you’re setting aside and put it into several certificates of deposit with different term lengths. That way you have greater access to your money than with CDs normally while you take advantage of the highest CD rates, which tend to be better than regular savings accounts.

» Ready to explore? Here are the highest CD rates

For example, instead of putting $10,000 into a one-year CD that you renew every year, divide it into five investments of $2,000. Then, open a one-year CD, a two-year CD, a three-year CD and so on. After a year, when your first CD matures, you can put that first $2,000 into a new five-year certificate. As each CD matures each year, you’ll repeat the process.

Since five-year CDs have higher APYs, you’ll get good rates, while still keeping your cash fairly accessible.

» Need more detail? Read our explanation of CD ladders

4. Join a credit union

Credit unions have higher average savings account rates than traditional banks. According to the National Credit Union Administration, credit unions pay an average of 2.21% on five-year CDs as of September 2019, compared with 1.71% at banks. Contact your local credit union for rates, or browse our list of best credit unions.

Beat the average savings account rate

The national average rate for regular savings accounts is 0.05% APY, but you can do much better, especially with an online bank’s high-yield option.

Rates may still not be as high as you might like — a 5% interest savings account, for example, is unlikely — but you’ll be able to grow your money in a safe interest-bearing account that earns much more than average.

We want to hear from you and encourage a lively discussion among our users. Please help us keep our site clean and safe by following our posting guidelines, and avoid disclosing personal or sensitive information such as bank account or phone numbers. Any comments posted under NerdWallet’s official account are not reviewed or endorsed by representatives of financial institutions affiliated with the reviewed products, unless explicitly stated otherwise.