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 TierneyApr 9, 2021
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When earning interest, your choice of bank account matters more than you might think. With the right account, you can earn more without extra effort. 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 good rates and without monthly fees.

Making $50 in a year: Keeping $10,000 in an account that earns 0.50% annual percentage yield, which is the interest rate when factoring compounding, can earn you a little over $50 in one year. Compare that with less than $10 you would get from a regular savings account earning the national average rate of 0.06% APY.

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

Alliant Credit Union logo
Learn More

Federally insured by the NCUA

Alliant Credit Union High-Rate Savings

Alliant Credit Union logo
APY

0.55%

Min. balance for APY

$100

Discover Bank logo
Learn More

Member FDIC

Discover Bank Online Savings

Discover Bank logo
APY

0.40%

Min. balance for APY

$0

2. Switch to a high-yield checking account

Some checking accounts have high rates, with some hoops. You might have to qualify by signing up for direct deposit and making close to a dozen debit card transactions a month. But if you can meet the requirements, your money could earn a strong rate.

» 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 you normally would with CDs while you take advantage of the highest CD rates, which tend to be better than the average savings account rate.

» 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.

» Need more detail? Read our explanation of CD ladders

4. Join a credit union

Credit unions have slightly higher average rates on savings products than traditional banks. For example, according to the National Credit Union Administration, credit unions pay an average of 0.85% on five-year CDs as of December 2020, compared with 0.70% at banks. Contact your local credit union for rates, or browse our list of best credit unions.

» One more option for saving: Learn about U.S. savings investments

Beat the average savings account rate

The national average rate for regular savings accounts is 0.06% 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.

Compare the best high-interest accounts
Choose a high-rate account that lets your money work for you.
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