7 Places To Save Your Extra Money | Bankrate (2024)

Whether you’ve earned a bonus at work or made a profit selling your house, having extra money gives you a chance to grow your savings and reach financial goals. Deciding on the best place to stash your cash isn’t always easy, however, and can depend on your individual circ*mstances.

Return on investment is an important factor to consider, as well as liquidity and how soon you might need access to the cash. Safety and investment costs should also be considered when determining where you should save extra money.

With that in mind, here are some options to consider.

1. High-yield savings account

A high-yield savings account is a viable option for growing your savings and providing easy access to the money for emergencies or other unplanned expenses.

To put the earnings into perspective, the yields on traditional savings accounts are typically very low, as little as 0.01 percent annual percentage yield (APY). On the other hand, the top high-yield savings accounts currently earn over 5 percent APY.

You can open a savings account to build an emergency fund or save for a vacation or home repair while having safety and liquidity.

If you need to access portions of your money from time to time, keep in mind savings account restrictions might be a problem. There could be a limit of six withdrawals or transfers per month, depending on the bank’s policies.

It’s important to have a savings account with a bank that’s insured by the Federal Deposit Insurance Corp. (FDIC). This way, you won’t lose your funds should the bank fail. The FDIC insures up to $250,000 per depositor, per FDIC-insured bank, per ownership category. Many credit unions are similarly insured by the National Credit Union Share Insurance Fund (NCUSIF).

2. Certificate of deposit (CD)

Like a savings account, a certificate of deposit (CD) is often a safe place to keep your money. One big difference between a savings account and a CD is that a CD typically locks up your money for a set term. If you withdraw the cash early, you’ll be charged a penalty.

CDs usually carry fixed yields, so tying up your funds in a CD can be a bad idea in a rising rate environment. Conversely, locking in your money can be a smart move during a time when rates are falling.

CD terms commonly range between three months and five years, although shorter and longer ones can be found. Common types of CDs include:

  • Traditional CD: This is the most common variety of CD, and it pays a fixed yield throughout its entire term. Taking out the funds before the term ends results in an early withdrawal penalty.
  • No-penalty CD: Also known as a liquid CD, this account allows you to withdraw the funds early, although no-penalty CDs usually pay lower yields than traditional CDs.
  • Bump-up CD: This CD typically allows you to request one rate bump throughout the term, if rates on CDs have improved.

One strategy to grow your earnings is to open several CDs that mature at different times. This is called CD laddering, and it provides flexibility and less risk than simply putting all of your money into a single CD.

3. Money market account

If you want a safe place to park extra cash that often earns a higher yield than a traditional savings account, consider a money market account. Money market accounts are like savings accounts, but they typically pay more interest and may offer a limited number of checks and debit card transactions per month.

A money market account can be a safe place to park extra cash and earn a higher yield than from a traditional savings account. Money market accounts are like savings accounts, but they often pay more interest and may offer a limited number of checks and debit card transactions per month.

Money market accounts offer easy access to your money, and they’re safe if your banking institution is federally insured. Some money market accounts offer a tiered structure that pays higher APYs for bigger balances.

A money market account can be a good alternative if you don’t want to tie your funds up in a CD for a long time. There are usually minimum deposit requirements for opening a money market account or for avoiding monthly maintenance fees.

4. Checking account

A checking account at a federally insured bank or credit union is a safe spot for money that’s earmarked for bills and everyday spending. It’s not necessarily the best place to save your money, however, since most earn little or no interest.

Checking accounts are highly liquid and come with check-writing privileges, ATM access and debit cards. Withdrawals can be made at any time, and there’s no risk to your principal.

Although it’s not common, there are checking accounts that offer decent yields. These accounts typically shouldn’t be your main place for storing savings, however.

Checking account fees are often nominal or waived if you maintain a minimum balance, set up direct deposit or use your debit card a certain number of times each month.

5. Treasury bills

Most checking and savings accounts, CDs and money market accounts offer federal deposit insurance, which is an important benefit.

But suppose you have cash stored up that exceeds federal insurance limits. In that case, you might want to look at U.S. Treasury bills, or T-bills, which are federal, short-term debt obligations with a maturity of one year or less. The longer the maturity, the more interest the investor earns.

T-bills also have the advantage of being liquid and easy to buy and sell. Plus, they’re extremely safe with no risk of losing principal, since they are debt that’s owned by the U.S. government.

T-bills are sold on the secondary market, such as through a broker or investment bank, or at auction on the TreasuryDirect site. They’re sold to investors for less than face value.

6. Short-term bonds

If you’re planning to park your cash somewhere for at least five years, consider options that are more like investments than savings accounts. An investment might generate a higher return, but all investments come with the risk that you could lose some or all of your money.

Unlike Treasury bills, short-term bonds don’t protect the principal. You could find that when you withdraw your money, you not only haven’t gained interest, but you’ve also lost some of the principal.

For example, a mutual fund that invests in short-term bonds might grow a little bit, but if interest rates rise, the value of the fund is likely to decrease. That’s because bond prices typically fall when interest rates rise. The longer the duration of a bond, the more vulnerable it is to rate fluctuations. That’s why some investors prefer short-term bonds.

7. Riskier options: Stocks, real estate and gold

Some people have a high risk tolerance, while others are only comfortable with safe investments, especially if they are retired or close to retirement.

Stocks, for example, can lead to high returns, though investors will need to bear the inevitable ups and downs of the market. A good place to get started is with an , which includes the largest, globally diversified American companies across every industry. This tends to make it less risky than other investing options and has returned about 10 percent annually over time to investors.

If you’re looking to make a long-term investment, you may want to look into buying a home as a rental property. Finding and securing a suitable property could be difficult, however, due to rising mortgage rates, high inflation and a housing supply shortage.

Another popular investment option is gold, especially during tough economic times. Some investors see gold as a safe place to park their money, while others are more skeptical. Nonetheless, the decision to invest in gold should be a personal one.

How a financial planner can help you save extra money

When deciding where to put your extra money, consider seeking expert advice from a financial advisor, who can help you set up an overall financial plan.

A financial advisor can help answer questions regarding complicated topics like estate planning. Such specialized financial topics can be hard to navigate, and there’s no shame in getting a second opinion and some guidance.

Do some research before choosing a financial advisor who is a good fit for you and your situation. First and foremost, always make sure that your financial advisor is a real fiduciary who is acting in your best interest.

Focusing on a solid financial plan makes it easier to decide which saving strategies work best for you.

— Former Bankrate writers Libby Wells and Liz Hund contributed to previous versions of this story.

7 Places To Save Your Extra Money | Bankrate (2024)

FAQs

Where can I get 7% interest on my money? ›

7% Interest Savings Accounts: What You Need To Know
  • As of May 2024, no banks are offering 7% interest rates on savings accounts.
  • Two credit unions have high-interest checking accounts: Landmark Credit Union Premium Checking with 7.50% APY and OnPath Credit Union High Yield Checking with 7.00% APY.

Where can I get 12% interest on my money? ›

Where can I find a 12% interest savings account?
Bank nameAccount nameAPY
Khan Bank365-day, 18-month and 24-month Ordinary Term Savings Account12.3% to 12.8%
Khan Bank12-month, 18-month and 24-month Online Term Deposit Account12.4% to 12.9%
YieldN/AUp to 12%
Crypto.comCrypto.com EarnUp to 14.5%
6 more rows
Jun 1, 2023

Where is the best place to save money? ›

The safest place to put money is in an interest-earning bank account at an FDIC-insured bank or an NCUA-insured credit union. There's no risk of losing your money. You'll find the best interest rates at online banks.

Which bank pays 7% interest on savings accounts? ›

This account is only available to first direct 1st Account customers. Find out more about our 1st Account. Our Regular Saver gives you a 7.00% AER/Gross p.a. interest rate.

Which bank gives 7% interest on CD? ›

Currently, no U.S. banks or credit unions are offering 7% APY on CDs. During August 2023, a few credit unions were offering 7% interest on CDs, but those were limited-time offers that are no longer available.

Where can I get 10% interest? ›

Where can I get 10 percent return on investment?
  • Invest in stock for the long haul. ...
  • Invest in stocks for the short term. ...
  • Real estate. ...
  • Investing in fine art. ...
  • Starting your own business. ...
  • Investing in wine. ...
  • Peer-to-peer lending. ...
  • Invest in REITs.

Where is the safest place to put $100,000? ›

Park your cash in an interest-bearing savings account

If you're still deciding how to invest your money, be sure it's stashed somewhere safe, like a certificate of deposit (CD). Deposits held at FDIC-member banks and NCUA-member credit unions are insured up to $250,000 per depositor, per financial institution.

How much cash can you keep at home legally in the US? ›

The government has no regulations on the amount of money you can legally keep in your house or even the amount of money you can legally own overall. Just, the problem with keeping so much money in one place (likely in the form of cash) — it's very vulnerable to being lost.

Where to put extra cash? ›

But there are some ideas that, when taken together, can put you in good financial standing and set you up for success over the long term.
  1. Open an interest-bearing account. ...
  2. Build up your emergency fund. ...
  3. Pay down your debt. ...
  4. Set aside money for large upcoming purchases. ...
  5. Consider investing what's left over.
Mar 13, 2024

Where should I save $100,000? ›

Bottom Line. With $100,000 to invest, you have a plethora of options for how to invest the money. You can park it somewhere safe, like a CD or high-interest savings account, or you can take a little risk and invest in the stock market. If you go the investing route, you can choose how much risk you want to assume.

Where is the safest place to keep cash at home? ›

Where to safely keep cash at home. Just like any other piece of paper, cash can get lost, wet or burned. Consider buying a fireproof and waterproof safe for your home. It's also useful for storing other valuables in your home such as jewelry and important personal documents.

How can I earn 7% on my money? ›

Savings accounts that earn interest in the neighborhood of 7% are considered high-yield savings accounts. These accounts are often found at online banks and smaller credit unions.

Which bank gives 8% interest? ›

Top 20 Scheduled Banks offering Best FD Rates
BanksHighest FD rate (% p.a.)3-year FD rate (% p.a.)
Fincare Small Finance Bank8.007.50
RBL Bank8.007.50
AU Small Finance Bank8.007.50
IDFC First Bank7.907.25
16 more rows

Where can I make 10% interest on my money? ›

Where can I get 10 percent return on investment?
  • Invest in stocks for the short term. ...
  • Real estate. ...
  • Investing in fine art. ...
  • Starting your own business. ...
  • Investing in wine. ...
  • Peer-to-peer lending. ...
  • Invest in REITs. ...
  • Invest in gold, silver, and other precious metals.

Which bank is giving 6% interest in savings accounts? ›

Digital Federal Credit Union has an account that pays over 6% APY, but you must meet membership requirements to get started. You also won't earn this high interest rate on your entire Digital FCU savings balance. Plenty of savings accounts are available around the U.S. and still offer great rates — over 5% APY.

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