Key Takeaways
- Watch out for these common mistakes that can hinder your savings growth: keeping excess funds in a checking account, not being aware of savings account rates and fees, failing to shop for competitive rates, underestimating the benefits of CDs, and allowing CDs to roll over automatically.
- Easy solutions include moving surplus funds to a high-interest savings account, considering CDs for long-term savings, and actively managing maturing CDs.
- Discover top high-yield savings accounts offering rates up to 5.55% and leading CDs with rates ranging from 4.80% to 5.65%.
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5 Mistakes Americans Make With Their Savings
Building savings and maximizing interest are essential financial strategies. However, avoiding common errors in managing your savings is crucial to optimizing your earnings and achieving your financial goals efficiently.
Mistake #1: Over-Funding Your Checking Account
While a checking account is convenient for daily transactions, it typically offers minimal interest returns. To make the most of your money, consider transferring excess funds to a high-yield savings account. Regular savings contributions help build an emergency fund steadily.
If you lack a high-yield savings account, open one to earn competitive interest rates. Opting for a separate account can prevent your money from sitting idle in a checking account.
Mistake #2: Not Knowing What You’re Earning—or Losing
Ignorance of your savings account’s interest rate can result in missed earnings and potential fees. Review your account’s APY and assess any incurred charges to ensure you’re maximizing your savings.
Regularly monitor your account for fees and clarify any unclear transactions with your financial institution to avoid unnecessary charges.
Mistake #3: Not Doing Your Homework on Rates
Savings rates vary widely, yet many individuals neglect to compare rates, missing out on potential earnings. Spend time researching and ensure your savings rate is competitive.
Utilize resources like our daily high-yield savings account rankings to easily identify top rates and make informed decisions about your savings.
Mistake #4: Not Considering a CD
CDs offer fixed rates for specific terms, often outperforming standard savings accounts. Don’t overlook CDs as a viable savings option due to misconceptions about complexity or balance requirements.
Explore competitive CD rates through our daily research to enhance your savings strategy effectively.
Mistake #5: Letting a CD Auto-Renew
Automatic CD renewal can lead to subpar rates and restrict access to your funds. Take control of maturing CDs by proactively managing your funds to secure optimal rates.
Before your CD matures, communicate preferences with your financial institution to avoid unfavorable renewal terms. Redirect funds strategically to maximize savings opportunities.
How We Find the Best Savings and CD Rates
Investopedia analyzes data from over 200 federally insured banks and credit unions daily to identify top-paying savings and CD accounts nationwide. We consider account accessibility, minimum deposits, and institution coverage to compile our rankings.
Our methodology ensures transparency and reliability in presenting the most rewarding savings and CD options available to consumers.