4 Options for Your Money Other Than the Bank

4 Options for Your Money Other Than the Bank

By Andrew Lisa May 3, 2022 Banking 101

Get savings account safety, but with better returns.

With the average deposit yield stuck at around 0.06% and inflation at a 40-year high of 8.5%, saving isn’t exactly the right word to describe what you’re doing with your money when you put it in the bank in the current economic climate. If you’re looking for an alternative way to grow your money, you could always invest it — but that comes with a level of risk that your emergency fund might not be able to tolerate.

The good news is that savings accounts aren’t the only game in town when it comes to safe, insured, interest-bearing places to stash your cash. In fact, there are options that you might not know about that pay higher yields and offer more convenience than savings accounts without any more risk to the money you’re trying to grow.

Keep reading to learn about some of the best savings account alternatives where you might be able to get your money to work a little bit harder for you.

Credit Unions

If you want all the familiarity of a bank — checking and savings accounts, debit cards, online banking, mobile apps and all the rest — but with better rates and kinder customer service, ditch your big bank and give your local credit union a chance.

Credit unions are member-owned non-profits — when you make a deposit, you’re buying a stake in the institution. With no hungry shareholder mouths to feed, credit unions are known for offering higher yields on deposits and better rates on loans than banks.

Certificates of Deposit

Certificates of deposit (CDs) are a type of savings vehicle that holds a predetermined amount of money for a predetermined period of time. Unlike regular savings accounts, you can’t withdraw your money until the CD matures, which might be after a term of six months, a year or five years.

The longer the term, the higher the yield you’ll earn, and when the CD matures, you can take back your cash plus the interest you gained. The catch is that you’ll be hit with a penalty if you withdraw your money before the term expires. They’re safe investments — the risk is that inflation will outpace your yield, which can reduce or even eliminate your real returns.

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