8 low-risk ways to earn higher interest

Are you looking for ways to make your money work for you without taking on too much risk? With the Federal Reserve raising its benchmark interest rate to a 22-year high, now is a great time to explore low-risk options for earning higher interest. In this article, we will discuss eight strategies that can help you increase your earnings while keeping your funds safe.

1. Switch to a High-Interest Savings Account

Consider opening a high-interest savings account to earn better rates than traditional accounts. Online banks are a great place to start your search, as they often offer higher rates and lower fees compared to traditional banks. Currently, the best high-yield savings accounts earn an annual percentage yield (APY) of 5.15 percent, which is around 10 times the national average rate. By opting for a high-yield savings account, you could earn significantly more interest on your deposits.

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2. Consider a Rewards Checking Account

Some banks offer rewards checking accounts that allow you to earn cash back on your debit card purchases. If you frequently use your debit card for transactions, this type of checking account can be beneficial. Additionally, certain rewards checking accounts pay higher interest rates, although there are usually requirements to qualify for the elevated rate. Make sure to evaluate if you can meet the necessary criteria to earn the bonus rate.

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3. Consider Certificates of Deposit (CDs)

Certificates of deposit (CDs) can provide higher interest rates compared to traditional savings accounts. However, keep in mind that CDs have specific terms and conditions. When you open a CD, you agree to leave your money in the account for a set period of time. Withdrawing your deposit early may result in an early withdrawal penalty. The advantage of CDs is that you lock in the interest rate when you open the account, regardless of market fluctuations.

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4. Build a CD Ladder

CD ladders combine the benefits of CDs and savings accounts. By opening multiple CDs with staggered maturity dates, you can access portions of your money regularly without facing penalties for early withdrawals. CD ladders allow you to earn higher yields while maintaining some flexibility. The structure of your CD ladder depends on your desired level of flexibility and the frequency of accessing your funds.

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5. Take Advantage of Bank Bonuses

Many banks offer introductory bonuses to new customers who meet certain requirements, such as setting up direct deposits and making a minimum number of transactions each month. These bonuses are an easy way to boost your earnings if you already have some savings. Be sure to carefully read all the terms and conditions associated with these promotions to avoid any unexpected fees or penalties.

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6. Try a Money Market Account

Money market accounts offer a mix of features found in both savings and checking accounts. They pay interest, sometimes at higher rates than high-yield savings accounts, while also providing check-writing privileges and debit cards. However, keep in mind that money market accounts may have higher fees and minimum balance requirements compared to savings accounts.

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7. Check with Your Local Credit Union

Credit unions, which are not-for-profit financial institutions owned by their account holders, often offer lower fees, better account perks, and higher interest rates compared to traditional banks. If you have access to a credit union, it’s worth checking the rates they offer. Some credit unions even allow you to perform all your banking transactions online, making it convenient for those who prefer digital banking.

8. Consider Buying Government Bonds

If you’re willing to accept a little more risk, consider investing in government bonds instead of traditional savings accounts. Bonds allow you to make loans to companies or governments, earning interest over time. While some bonds may be subject to changes in market rates, they generally offer higher yields compared to savings accounts. U.S. Savings or Treasury bonds, as well as corporate bonds, are options to explore.

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Earning Higher Interest: Which Option is Right for You?

Choosing the right interest-bearing option depends on your needs, risk tolerance, and the effort you’re willing to put in. Consider factors such as the accessibility of your funds, existing debt, and your ability to meet specific requirements for bonuses or elevated rates. Each option has the potential to increase your interest earnings, so take some time to think about which strategy aligns with your financial goals.

Remember, your money should work for you, and by exploring these low-risk strategies, you can boost your interest earnings while maintaining a level of financial security.

To learn more about personal finance tips and steps towards financial freedom, visit Simple Money Tips – Steps To Financial Freedom.

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Earning higher interest in a low-risk way is possible through various options such as high-yield savings accounts, rewards checking accounts, CDs, bonds, and bank bonuses. These strategies offer relatively safe ways to increase your earnings while staying within your risk tolerance. Evaluate the different options and choose the one that aligns best with your financial goals and circumstances.