How Do I Earn Interest on My Savings Without Investing?

Our editor-in-chief 'makes cents' of earning more interest on savings

Illustration of a stack of hundred dollar bills

The Balance/Alice Morgan

Dear Kristin,

I've finally reached a place in my life where my savings account feels really robust and my parents have mentioned that I should start exploring other options to make sure I'm maximizing my interest. I feel so overwhelmed and intimidated by this—what are my other options?

I don't feel prepared to jump into stocks or property investments, which I know are common routes for people my age. Are there easier ways or types of accounts I can leverage to ensure my money isn't just sitting collecting cobwebs but is actually building sizable interest?


Unsavvy Saver

Dear Unsavvy, 

Congratulations on saving up a sizable amount of money! You don’t mention how much you’ve managed to save, but at minimum, you’ll want to set aside at least three to six months’ worth of expenses in an emergency fund (six or more is even better).

After that, you can build up more interest on the rest of your savings by taking advantage of a high-yield savings account. It’s a savings account that has a higher interest rate than your typical savings account—known as the annual percentage yield (APY)—and is usually offered by online-only banks. While you may not want to move all your money to such an account (you may have use for the financial services offered by your current bank), it’s something to consider.

You could also place your money into a money market account, which is a combination of a savings and checking account that gives you a higher interest rate. Money market accounts are not as flexible as your average checking account, though. There are limits on the number of payments and withdrawals you can make per month by check, electronic transfer, draft, and debit card.

A CD (certificate of deposit) is another low-risk way to earn interest. A CD is a type of savings account that pays you a fixed amount of interest at the end of a specified term, such as six months or one year. The catch here is that you won’t be able to touch your money (without a penalty) until the term is up and the CD has reached its maturity date.

I hear you when you say you are overwhelmed and intimidated by investing, but you write that you want to earn a “sizable” amount of interest on your funds, and investing is truly the best way to do that. Investing doesn’t need to be difficult; there are less risky, easier types of investments you can explore as a beginner.

While I generally suggest new investors invest in ETFs (exchange-traded funds) or index funds, it seems that both are out of your comfort zone. It sounds like you’d be a “conservative” investor—you want low-risk investments that can still beat inflation. Lucky for you, there are a whole host of investments to choose from. Bond funds and balanced funds might be good choices. Just remember: “Low risk” doesn’t mean “no risk” and you may want to seek further advice from a financial advisor. 

I do want to stress that with that low risk, you are also looking at a low reward. If you want to build up a sizable amount of interest to help grow your funds, you’re going to want to expand into other investments. Start small, and build up your investments over time. 

Good luck!


If you have questions about money, Kristin is here to help. Submit an anonymous question and she may answer it in a future column.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Washington State Department of Financial Institutions. “Saving for Emergencies.”

  2. Consumer Financial Protection Bureau. “What Is a Money Market Account?

  3. “How To Save and Invest.”

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