4 ways to earn more interest on your savings

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Who doesn't want to earn more interest on their savings — particularly in today's challenging economic environment? Inflation is still high, and with prices up on nearly everything up, we could all use a little more cash in the bank. But unfortunately, rates on basic savings accounts just aren't keeping up. According to the Federal Deposit Insurance Corp., the typical savings account earns just a 0.42% APY.

While there are other options to grow your money — like investing in the stock market or buying real estate, for example — those often come with risk. Interest-earning accounts, on the other hand, are one of the safest ways to expand your wealth.

Still, that growth can vary widely depending on what type of account you open and where you get it. So, if you want to make sure you're maximizing the interest that your savings earn, here's what you'll need to do.

Get started by comparing some of the top high-yield savings options available now.

Many banks and financial institutions offer high-yield savings accounts, which typically come with much higher interest rates than your more basic accounts. Rates on these have increased significantly over the last year, largely thanks to the Federal Reserve, which has increased short-term interest rates 11 times since March 2022.

"High yield savings accounts are paying, on average, around 4.5% — the highest they have been since the 2008 financial crisis," says Jill Fopiano, CEO of O'Brien Wealth Partners.

What's even better? Those rates should remain high — and could trend even higher — as 2023 goes on.

"Rates on high-yield savings and money market funds should remain near current levels until the Fed starts cutting interest rates," Fopiano says. "Current Fed guidance suggests that they are not likely to cut rates over the next few months."

If you don't need immediate access to your cash, certificate of deposit accounts — or CDs — might be an option, too. These require you to keep your money untouched for a set amount of time, but they often come with higher interest rates than other options — especially in the long run.

"Depending on the time horizon for using the assets, locking in a three- or five-year CD at current rates may make sense for people," Fopiano says. "While the Fed's moves have no direct influence on savings rates, deposit rates are correlated with Fed funds rates and are likely to decline once the Fed starts cutting rates. In that event, locking in a higher yield