3 ways you’re losing money (and how to fix it now)

While there are some encouraging signs that the economy is on the rebound, many Americans are still coping with inflation and higher prices for food and groceries. Higher interest rates and the potential for them to continue to rise have also been discouraging. In this environment, it makes sense to save as much money as possible. But savings doesn’t mean just cutting back on spending. It also means taking advantage of your current funds to get as much as you can out of them.

But how do you do that? There are multiple ways you’re likely losing money in today’s economy. Below we’ll list three issues to be aware of and the simple solutions you can take now to boost your savings.

Start by exploring high-yield savings account options now to see how much more interest you could be earning. 

3 ways you’re losing money (and how to fix it now)

Here are three money problems (and solutions) to know now.

You have a regular savings account

If your money is parked in a regular savings account then you’re losing money. It’s really as simple as that. Just look to the FDIC to confirm. According to the corporation, the average interest rate on savings accounts currently stands at 0.40%. So, if you put $5,000 into a regular account you’ll have earned $20 after a full year. High-yield savings accounts, meanwhile, can earn up to 12 times the average savings account rate.  

Now let’s compare the $5,000 in the regular account to a high-yield account with a 4.85% interest rate. By depositing that same amount into a high-yield savings account you’ll have grown your bottom line to $5,243 over the same time period. That’s $223 you’re losing by simply leaving your money untouched in a regular savings account. And you could potentially earn even more if you deposited a larger amount. And rates on these accounts may go even higher depending on the Fed’s next rate decision, expected later in June. 

So stop losing money with your regular savings account and transfer your funds to a high-yield account, instead. Get started here now.

You have a regular checking account

You may view your checking account as a utilitarian part of your everyday banking. But that would be a mistake. You can actually find a checking account that you can still use to pay your bills while also still earning interest on your balance. Axos Bank, for example, offers an interest rate of 3.30% to qualifying account holders. That could equate to hundreds of extra dollars earned each year, depending on the balance you leave in the account. 

But it’s not just interest rates that make it worth ditching your regular checking account. Some other banks don’t charge monthly maintenance or overdraft fees, leaving some much-needed extra money in your account. Granted, some of the very best checking accounts are offered by online banks and lenders but if you pay most (or all) of your bills electronically anyway, it won’t be a huge transition – and you’ll save more money and earn more interest in the process.

Explore your checking account options here today to learn more.

You don’t have money in a CD

Certificates of deposit (CD) accounts don’t offer the same flexibility as high-yield savings and checking accounts do. But that doesn’t mean that they’re still not a great way to protect and grow your money, particularly in today’s high rate environment. 

CDs will help you stop losing money by locking it up in an account that can’t be withdrawn from unless the account holder is willing to pay a penalty. But, while in the account, the bottom line will also grow, typically at an interest rate exponentially higher than what’s being offered with regular savings accounts. There are currently multiple CDs with an APY of 5% and higher that have no fees. While you don’t want to lock all of your money away in a CD, it may make sense to split your funds in three ways: with a high-yield savings account, a checking account that earns interest and some money to save for the future in a high-earning CD.

See how much more money you could be making with a CD here now.

The bottom line

In today’s inflationary environment, it helps to know all of your options. Every extra dollar helps, so make sure you’re not losing money and instead consider shifting some or all of your savings into a high-yield savings account instead of a regular one. Also, look for checking accounts with no fees and high interest rates and short-term CDs that can protect your money and grow it at a high rate while it’s locked away for the full term.