The simplest ways to earn more on what you save
The interest your bank pays you depends on two things: the rate they offer, and how much money sits in your account. You can't control the first one alone — rates change with the economy — but you can control where you keep your money and how you use it. Moving to a bank that pays more, keeping a larger balance, or choosing a different account type can all increase what you earn without adding a dollar of your own.
The difference between a 0.01% rate and a 4% rate is real money. On $10,000, that's the difference between $1 a year and $400 a year. On $50,000, it's $5 versus $2,000. Most people don't know their current rate, and many are earning far less than they could by staying at the bank where they opened their first account.
Key Takeaways
- Online banks and credit unions typically pay 4 to 5 times more interest than traditional brick-and-mortar banks, because they have lower overhead costs.
- High-yield savings accounts are regular savings accounts with higher rates — they work the same way but your money grows faster.
- Money market accounts pay higher rates than savings accounts but may require a larger opening balance and limit how often you can withdraw.
- Certificates of deposit (CDs) pay the highest rates but lock your money away for a set time — you pay a penalty if you withdraw early.
- Your current bank's rate is public information you can find on their website or by calling; comparing rates takes 15 minutes and can add hundreds of dollars a year to your savings.
Compare your current rate to what's available now
Start by finding out what your bank is actually paying you. Log into your online banking, call the customer service number on the back of your card, or visit a branch and ask for your savings account rate. Write it down. Then spend 15 minutes looking at rates from three other banks — one online bank, one credit union if you're a member, and one traditional bank in your area.
Online banks like Marcus, Ally, and Discover typically pay 4% to 5% on savings accounts right now. Credit unions often pay similar rates for members. Traditional banks with physical branches usually pay 0.01% to 0.5%. The difference is not a mistake — it's real. Online banks have no tellers, no buildings, and no security guards, so they pass those savings to you as interest.
Write down the rates you find. If your current bank is paying less than half what others offer, moving your money is worth the 10 minutes it takes to open a new account online. You don't have to close your old account; you can keep both and move only your savings.
High-yield savings accounts: the easiest upgrade
A high-yield savings account is just a regular savings account with a higher interest rate. It works exactly the same way — you deposit money, it sits there, and the bank pays you interest monthly. You can withdraw whenever you want. The only difference is the rate.
Most online banks offer high-yield savings accounts as their main product. You open one entirely online, usually in 10 minutes. You'll need your Social Security number, a government ID, and a way to fund the account — either a transfer from another bank or a check you mail in. Money typically arrives within one to three business days.
The tradeoff is convenience: you can't walk into a branch and deposit cash, and transfers to other banks take a day or two instead of being when ready. For most people saving money, that's not a problem. If you need to deposit cash regularly, look for an online bank that partners with ATM networks or a credit union near you.
Money market accounts: higher rates with more limits
A money market account is a hybrid between a savings account and a checking account. It usually pays more interest than a savings account but less than a CD. In exchange, it often requires a larger opening balance — sometimes $2,500 or more — and limits how many times you can withdraw each month.
Some money market accounts come with a debit card or checks, so you can access your money more easily than with a savings account. Others are purely online with no card at all. The rules vary by bank, so read the fine print before you open one.
Money market accounts make sense if you have a larger amount to save, want a slightly higher rate than a regular savings account, and don't need to withdraw often. If you're saving for an emergency fund that you might need to tap quickly, a regular high-yield savings account is usually better because it has no withdrawal limits.
Certificates of deposit: the highest rates for locked-away money
A certificate of deposit (CD) is an account where you agree to leave your money untouched for a set time — usually three months, six months, one year, or five years. In exchange, the bank pays you a higher interest rate than it would for a savings account. The longer you lock the money away, the higher the rate.
When your CD reaches its maturity date (the end of the agreed time), you get your money back plus all the interest. You can then withdraw it, spend it, or open a new CD. If you withdraw before the maturity date, you pay a penalty — usually a few months' worth of interest.
CDs are useful for money you know you won't need for a specific amount of time. If you have $5,000 you won't touch for two years, a two-year CD might pay 4.5% while a savings account pays 4%. That extra 0.5% adds up. But if you might need the money in 18 months, the penalty for early withdrawal could wipe out that gain, so a savings account is safer.
Keep a larger balance to earn more interest
Some banks pay higher rates on higher balances. A bank might pay 4% on balances up to $100,000 and 4.5% on anything above that. Others pay the same rate no matter the balance. Check your bank's rate sheet to see if yours has tiers.
If you have multiple savings accounts at different banks, consolidating them into one account at a bank with tiered rates can bump your rate up slightly. This only matters if you have a substantial balance — usually $25,000 or more — but it's worth checking.
Don't move money around just to chase a slightly higher rate if it means paying fees or losing access to your cash. The goal is to earn more on what you're already saving, not to create extra work or risk.
Understand what affects interest rates and when they change
Bank interest rates move up and down based on what the Federal Reserve does. When the Fed raises its benchmark rate, banks usually raise the rates they pay on savings. When the Fed lowers rates, banks follow. This happens several times a year, sometimes in big jumps and sometimes in small ones.
You don't need to predict what rates will do. What matters is that the rate you see today is what you'll earn today — but it may be different in three months. If you find a bank paying 4.5% right now, that's what you'll get when you open an account. If rates drop to 4% next month, your rate might drop too (banks can change rates anytime). If rates rise to 5%, your rate might rise as well.
This is why it's worth moving your money now if your current bank is paying much less than others. You'll earn more in the meantime, and if rates rise, you'll benefit from that too. You're not betting on the future — you're just moving to where the money is better today.
Frequently Asked Questions
Can I move my money to a new bank without closing my old account?
Yes. You can open a new account at another bank and transfer money there while keeping your old account open. You don't have to close anything. Many people keep a small amount in their original bank for convenience and move their main savings to a higher-paying bank.
Will moving my money hurt my credit score?
No. Opening a savings account or moving money between banks does not affect your credit score. Credit scores are based on borrowing and repayment history, not on where you keep your savings.
What if I need my money before a CD matures?
You can withdraw it, but you'll pay an early withdrawal penalty — usually three to six months of interest. Calculate whether the penalty is worth it before you withdraw. Sometimes it's cheaper to leave the money in the CD and let it mature.
How often does the interest get added to my account?
Most banks add interest monthly, though some add it daily or quarterly. Monthly is standard. The more often interest is added, the slightly more you earn because you earn interest on the interest — but the difference is small unless you have a very large balance.
Is my money safe in an online bank?
Yes, as long as the bank is FDIC-insured. FDIC insurance means the federal government guarantees your money up to $250,000 per account if the bank fails. Almost all online banks are FDIC-insured. Check the bank's website or call to confirm before you open an account.