By Finding the best way to make money on savings is crucial in today’s economic climate. According to Trading Economics, the inflation rate in the United States stayed at 2.70 percent in July. Historically, it has averaged 3.29 percent from 1914 until 2025. Consequently, leaving money idle can erode its value over time. Therefore, exploring low-risk financial products becomes a smart move.Â
In addition, many digital banks now offer higher rates than traditional ones. But how? Read the answer in the discussion below!
Key Takeaways
- High-yield savings accounts and fixed deposits offer better returns with minimal risk.
- Automating savings and reinvesting returns accelerates financial growth.
- Comparing rates and keeping an emergency fund protects and maximizes savings.
How to Grow Money on Savings in 7 Profitable Strategies
In the following, we’ve simplified the best way to make money on savings and transform it into a steady income stream. Your personal guide to earning more starts here!
1. Open a High-Yield Savings Account
A high-yield savings account offers a much higher interest rate than traditional savings accounts, making it an attractive option for growing your money with minimal risk. Many digital banks, which operate with lower overhead costs, can pass these savings on to customers in the form of better rates.
While the returns may not match those of higher-risk investments like stocks, they typically outperform standard savings accounts while still offering full liquidity. To ensure your money is protected, always confirm that the bank is covered by a deposit protection scheme, which insures your funds up to a specified limit.
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2. Use a Fixed-Term Deposit
If you can set aside your money for a fixed period from months to years, then a fixed-term deposit offers predictable interest and stability. Moreover, rates are usually higher than standard savings accounts since banks can use your funds longer. But, early withdrawals often incur penalties, so commit only what you won’t need soon.
3. Invest in Money Market Funds
Money market funds pool investors’ money to buy low-risk, short-term assets like government securities or quality corporate debt. Consequently, they often provide better returns than regular savings accounts while keeping funds liquid. They’re ideal for beginners seeking low-risk growth, but note they may not be insured like bank deposits.
4. Set Up Automatic Savings Transfers
Consistency is also the best way to make money on savings that many people don’t realize. By automating transfers from your checking account to a savings or investment account, you make sure the money is set aside before you’re tempted to spend it.
Over time, this disciplined approach creates a strong foundation for building wealth. When combined with the power of compounding interest, even small, regular contributions can grow into a substantial amount.
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5. Utilize Savings Accounts with Bonus Interest
Some banks offer accounts that pay bonus interest when you meet certain conditions such as depositing a minimum amount each month, maintaining no withdrawals, or hitting a target balance.
These incentives can increase your effective interest rate without any risk. However, it’s important to read the terms carefully to ensure you can meet the requirements consistently.
6. Consider Government Bonds
Government bonds are one of the safest investment options that offer stability and predictability. By purchasing them, you are essentially lending money to the government in exchange for fixed interest payments over a specific period.
In many countries, they also provide tax incentives, adding to their appeal. This makes them ideal for risk-averse savers seeking guaranteed returns and the reassurance of government-backed security.
7. Join a Credit Union
Credit unions are member-owned financial institutions that often provide better interest rates on savings accounts than commercial banks. They also tend to have lower fees and a more personalized approach to customer service. Membership requirements vary, but if you qualify, this could be a rewarding long-term relationship for your finances.
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Tips for Maximizing Growth
Even with low-risk strategies, the way on how to maximize savings can make a big difference. Here are three essential tips to help you get the most out of your money.
1. Compare Interest Rates and Terms Before Committing
Rates and conditions vary widely between institutions. Before opening any account or investment, compare the annual percentage yield (APY), fees, and withdrawal restrictions. A slightly higher rate can make a substantial difference over time, especially when compounded.
2. Keep an Emergency Fund Separate
An emergency fund ensures you won’t have to break a fixed-term deposit or sell an investment at the wrong time. Ideally, keep three to six months’ worth of living expenses in a highly liquid account. This protects both your finances and your growth strategies from unexpected events.
3. Reinvest the Returns to Accelerate Growth
Instead of withdrawing interest or dividends, reinvest them. This allows your savings to benefit from compounding, the process of earning interest on your interest. Over the years, this can turn modest returns into significant gains without increasing your risk.
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Secure Your Future with the Best Way to Make Money on Savings
Securing your future begins with finding the best way to make money on savings. These strategies help protect your funds from inflation while steadily growing your wealth. Moreover, they offer low-risk options suitable for various goals. With the right plan, your savings can work harder for you. So, start today to build lasting financial security!
