Experts' tips for maximizing your savings today
Amid still-elevated prices and high interest rates on loans, one area Americans can benefit from in today's financial environment is their savings.
In particular, savings rates on deposits in high-yield savings accounts and certificates of deposit (CDs) can offer as high as 5% returns on savings balances. Whether you're saving for an emergency fund or you have a specific savings goal in mind, the interest you earn can help you get there faster.
But don't underestimate the difference that can also be made with the right plan and taking action to boost your savings today.
Find out how much you can earn with today's top savings rates now.
How to maximize your savings today, according to experts
We asked financial experts for their advice for savers looking to maximize their savings today. Here are a few of their best tips:
Open a high-yield savings account
If you're not contributing to a high-yield savings account already, now is the time to start. Because these accounts offer both competitive rates and easy access to the cash you save, they are ideal for any short-term savings or emergency fund.
"For the portion of your portfolio that you may need to access on a daily basis, like your emergency fund, a high yield savings account can be a great option," says Adam Van Wie, CFP and chief operating officer of Van Wie Financial. "Many of these accounts are now paying 4% or more."
In fact, the highest-yielding accounts today can earn up to 5% APY. Explore top savings rates you can use to start earning more on your balance here!
Have a spending plan
You'll have more success with any financial goal — and get there faster — with a plan. That includes how you spend and save. When you use a spending plan or budget and know exactly where your money is going, it can help you to most effectively reach your goals.
"A spending plan simply allocates where you are going to spend money," says Jane Mepham, CFP, founder of Elgon Financial Advisors. "One of the categories should be a savings bucket which should be automated right away. This means treating it like an expense."
You might choose to send the amount leftover after expenses each month to savings, or have a specific amount transferred to your savings on a regular basis.
"The typical way I see people doing this is to save last after all the spending," Mepham says. "But by automating this and having it as a major category, it's very easy to save money. It's also a way of reducing the friction of saving."
Use separate accounts for different goals
Some experts say you can get even more value from multiple high-yield accounts dedicated to various savings goals rather than just one savings account.
To start improving your savings, consider opening a separate high-yield savings account and naming it after your goal, says Daniel Kopp, CFP, founder of Wise Stewardship Financial Planning. He gives "Glacier National Park vacation fund" as an example.
"Set up automatic transfers to it each month, and pre-commit to increasing that amount at your next raise, bonus, found money, etc.," Kopp says. "This approach leverages many behavioral finance techniques to help speed your progress."
Be consistent
Establishing a plan and opening the best savings account may start you on the right path — but developing good habits can lead to longer-term savings success. To start, make your savings contributions part of your regular routine.
"Contribute every month," says Mark Ziety, CFP, founder of WisMed Financial. "In my experience, those who save smaller amounts consistently tend to save more over time than those who try to save everything at once."
Whether you're able to save just $20 or a few hundred dollars each month, consistent deposits can turn into substantial balances over time. Plus, the more money you contribute, the more you'll earn interest on — helping to increase your savings even more.
Find out how much you can earn on your savings with today's top rates now.
The bottom line
Maximizing your savings today relies not only on choosing the right account, but taking the right steps toward your goals. To get started, make sure you have a high-earning savings account that can work for you with compounding interest. Then take steps to develop a spending plan, establish your goals and consistently add to your savings balance. Learn more about what you can start earning today by comparing top savings rates available now.
