Right now, the average personal loan interest rate is 12.65%, according to Bankrate. But what if there was a way to get a 0% interest rate for almost two full years instead?

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Before taking out a personal loan, see if you can qualify for a 0% intro APR credit card. In many cases, you can accomplish the same goals -- like consolidating high-interest debt or financing a large purchase -- without paying any interest at all.

This strategy isn't talked about enough, but it could save you thousands in 2025. Let's break down how it works.

What is a 0% intro APR credit card?

A 0% intro APR credit card lets you avoid interest charges for a promotional period, often 12 to 21 months.

The no-interest period can be for either:

• New purchases (useful for big expenses you want to split into payments)
• Balance transfers (good for consolidating and paying off existing high-interest debt)

Some cards offer both.

During the 0% APR promo window, every dollar you pay goes toward your actual balance, not toward interest. It's like hitting "pause" on the cost of borrowing.

This can be an amazing tool for people who are stuck with a mountain of existing credit card debt. Pausing interest gives them breathing room to pay down principal, and get out of debt faster with less interest.

If you're looking for a longer 0% APR period, check out this card that we recommend. It offers nearly two years of 0% intro APR for both new purchases and balance transfers. That's a huge window of time to make payments and pay no interest.

Why personal loans aren't always the best choice

I get why people like personal loans. They're great for bigger projects and payoff timeframes stretching multiple years. They're also predictable, structured, and can be easier to qualify for with fair credit.

But here's the problem. The interest starts immediately, and the rates aren't exactly cheap.

For example, let's say you take out a $10,000 personal loan at 11% APR for two years. Your total interest paid would be over $1,185.

Now compare that to putting that same $10,000 on a 0% intro APR card and paying it off over 21 months. You could pay zero in interest if you're disciplined.

When using a 0% intro APR card makes sense

Credit cards aren't magic. They can be a double-edge sword which can either help your finances or hurt them.

Here's when 0% intro APR credit cards make sense:

Paying off high-interest credit card debt

Balance transfer cards let you move your existing balance(s) to a new card with 0% APR for a set period.

Making a large one-time purchase

Got an unexpected car repair or medical bill? Instead of financing it with a personal loan, a 0% intro APR card can let you pay it off gradually over a lengthy promo period.

You have good-to-excellent credit

Most of the top 0% intro APR cards require good credit or higher (typically 670+). So definitely check your score first before applying.

What to watch out for

Two quick gotchas that you should be aware of:

1. Balance transfers come with a fee. This is usually 3% to 5% of whatever balance you transfer over. This isn't too bad though, as it's usually more than offset by the interest you can save.
2. The 0% intro APR period eventually ends. And when it runs out, the normal APR for the credit card will kick in (and it's likely super high!). So if you anticipate needing a loan for two years or longer, a personal loan may be a better fit.

Using a 0% intro APR credit card instead of a personal loan could save you hundreds (or even thousands) of dollars over the next couple years.

I've seen folks use these cards to escape debt faster, tackle emergencies, or finally feel in control again. It's a tool, not a shortcut -- but the right tool can make all the difference.

Looking for an interest-free alternative to a short-term personal loan? Explore the top 0% intro APR cards with up to 21 months of no interest

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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

I've always thought of certificates of deposit (CDs) as a decent mid-term play. The rates are predictable. The risk is low. But they've never really clicked with me.

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That's because CDs don't do much for two key goals:

• If I need short-term flexibility, a CD just ties my money up.
• If I want long-term growth, CDs get left in the dust by higher investing returns.

Even now, with some CDs offering 4.00% APY, I'd rather keep my cash in accounts that give me more control, or grow it in assets with higher upside.

Here's where I'd put my money instead.

Short term: A high-yield savings account

If you're saving for something in the next year or two (like a vacation or new car) your money needs to stay safe, liquid, and ideally earn big interest.

That's where high-yield savings accounts (HYSAs) shine. Some top online banks are offering near 4.00% APYs, and your money remains fully accessible.

Here are of the top perks of HYSAs:

• No early withdrawal penalties
• FDIC insurance on balances (up to $250,000 per depositor, per bank)
• Many online banks offer no fees, no minimum balances, and unlimited transfers.

I've personally kept my ~$25,000 emergency fund in an HYSA earning above 4.00% for the last couple years. And it's really paying off. I get nearly the same interest rate as some of the best 1-year CDs, but without any lockup.

Check out today's top HYSA rates and start earning more on your cash savings.

Long term: Low-cost index funds

CDs and savings accounts protect your money. But if you want your money to grow over the long term, investing is where the real power is.

Over the past 30 years, the S&P 500 has returned an average of about 10% annually. That's more than double today's top savings account and CD rates.

And when compounded over many years, the difference is mind-blowing.

Here's an example of how $10,000 would grow over decades at either a 4% or 10% average rate of return:

Personally, most of my long-term savings are in index funds. I've always seen index funds as one of the most reliable ways to build wealth over time, especially low-cost funds that spread your money across hundreds of companies (like S&P 500 funds).

If you're already contributing to a 401(k) plan, chances are you're investing in a mix of highly-diversified mutual funds already. But if you want more flexibility or investing options outside of retirement accounts, opening a regular brokerage account is a great move.

I don't try to stock pick or outperform the market. I'm happy taking an average return and letting time and compound interest grow my wealth.

The bottom line

CDs aren't useless. But they only suit a narrow scope of financial goals.

If you need short-term access and flexibility, high-yield savings accounts offer similar 4.00% returns with way less restriction.

And for long-term goals, low-cost index funds have a proven track record of building serious wealth over time.

Want to get in on the stock market's high returns? Check out our list of the best stock brokers to open an account and start investing today.

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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

I used to be naive about earning interest. For over a decade, I parked all my cash in a basic checking account, earning pennies.

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That one lazy habit probably cost me over $10,000 in missed growth throughout my 20s and 30s. Ouch!

But a few years ago, I wisened up and learned about high-yield savings accounts (HYSAs). I opened one online and last year alone, I earned $798 in interest.

Here's what you need to know about high-yield accounts, and how to 50x your earning rate.

Why your checking account is probably letting you down

Checking accounts are built for spending -- not saving. The problem is that most people use them for both.

Right now, the average checking account pays just 0.07% APY. That means $10,000 sitting there all year earns you just $7 in interest. Not even enough to buy a combo meal at In-N-Out Burger.

Meanwhile, some high-yield savings accounts (HYSAs) are paying over 4.00% APY. Same $10,000, but now you're earning $400 a year in interest.

That's over 50x the interest just for moving your money to a better spot.

HYSAs are just as safe and accessible

Here's what most people don't realize (I didn't either at first): High-yield savings accounts work basically the same as regular savings accounts -- except they actually pay you meaningful interest.

You can move money in and out easily. Most HYSAs link directly to your checking account (even at a different bank), so transfers are quick and painless.

And they're just as safe. Most HYSAs are FDIC insured up to $250,000, meaning your money is protected even if the bank goes under.

Even better, thanks to modern fintech banks, many of the top online HYSAs come with:

• No monthly fees
• No minimum balance requirements
• Unlimited transfers
• Clean mobile apps and fast support

The setup I use

I didn't ditch my old bank entirely. I still use it for checking accounts and my day-to-day banking.

But I keep as little cash as possible there. All my cash savings (emergency fund, short-term savings for travel, etc) are all stored in my HYSA.

Here's my current setup:

• Checking account: I keep about one month of expenses for bills and spending. This is where I get my paycheck deposited and pay all my bills.
• HYSA: I keep three to six months of expenses for emergencies and other short-term goals. This all earns 4.00% APY (about $3 in interest per day with my current balance!)

My accounts at both banks are connected to each other for easy transfers. It gives me the flexibility to move money around however I want while also earning a high interest rate.

How to switch (or add) a high-yield savings account

Opening an HYSA is super easy. It takes about 10 minutes online.

Here's how to do it:

1. Shop around for an account offering a high APY. Here's our list of top HYSA's right now, with rates up to 4.40% APY.
2. Open the account with a small deposit (most have no fees or minimums).
3. Link it to your current checking so you can transfer funds easily.
4. Move your savings. Feel free to start slow, but once you see how much interest you're earning, you'll probably move your entire cash pile into your new HYSA.
5. Automate any recurring deposits you want to grow.

Pro tip: Set a calendar reminder every six months to check your APY. If your rate drops or circumstances change, it might be time to re-evaluate.

Stop forfeiting free money

Don't let your money sit around doing nothing.

If you're earning close to 0% interest like I was for many years, you could be missing out on hundreds (or even thousands) of dollars every year in free, no-risk growth.

Opening a high-yield savings account is fast, easy, and makes your money more productive overnight. Compare all the top high-yield savings accounts here and start earning more today.

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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

Right now, the average savings account pays just 0.38% APY. The average checking account is even lower, at 0.07% APY. That's less than a dollar a year in interest on a $200 balance.

Looking for a secure place to grow your savings? See our expert picks for the best FDIC-insured high-yield savings accounts available today - enjoy peace of mind with competitive rates.

But some of today's top banks are offering 4.00% APY or more for high-yield accounts. I'm using one personally and earned $798 in interest last year alone. Oh yeah, and my bank has no fees, account minimums, or the clunky tech of old-school institutions.

If you've been with the same bank for two decades, you're probably leaving money (and modern features) on the table. Here's what you could gain by switching.

Earn up to 10x more interest

The biggest reason to ditch your outdated bank account is higher interest. Way higher.

Traditional banks are notoriously stingy when it comes to paying interest. Meanwhile, modern online banks are fighting for your business by offering high-yield savings accounts (HYSA) with rates of 4.00% APY or more.

This can mean earning a LOT more money on your savings. Here's the difference interest can make with a $10,000 balance over the course of a year:

It's the same money. Just parked in a better place. And earning over 10X the national average savings rate.

And before you ask -- yes, online banks are just as secure as traditional banks. They're FDIC insured with protection up to $250,000 per depositor.

By the way, you don't need to completely switch everything to a new bank. Personally, I still keep my everyday checking with a big bank (Chase). But all my cash reserves are over at an online HYSA with a top rate.

Goodbye maintenance and junk fees

On average, top U.S. banks charge $13.95 per month in checking account fees, according to a February 2025 MoneyRates report.

That's over $165 a year, just for the privilege of having an account. No thanks!

Most fintech banks are built differently. They pride themselves on charging no fees and having no account minimums. Particularly for online banks… Their lean physical footprint and modern applications means they have less overhead to cover.

Here are a few things you can look forward to with many online fintech banks.

• $0 monthly maintenance fees
• $0 overdraft fees
• No minimum balance requirements
• Free ATM access or fee reimbursements

Some even refund ATM charges from other banks -- which means you can access your cash without hunting for the "right" ATM.

In other words, you keep more of your own money. And that's the whole point, right?

Enjoy faster apps and smarter tools

To their credit, I will say that big bank mobile apps are starting to get less "clunky." They handle the banking basics just fine, like mobile deposits and money transfers.

But fintech banks take it even further. Built for the app generation, they typically come with faster interfaces, user friendly designs, real-time alerts, and slicker user experiences overall. It's modern banking that actually feels modern.

It's time to switch (or at least explore alternatives)

You don't have to cut ties with your old bank completely. I didn't. I use a hybrid setup, with a couple accounts at a big-name bank for convenience, and a few higher-yield accounts at online banks to make the most of my cash savings.

Even just shifting part of your cash to a better account can make a big difference. So don't settle. Start saving more today with a high-yield, online bank that pays YOU for being a customer.

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Click here to read our full review for free and apply in just 2 minutes.

We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.JPMorgan Chase is an advertising partner of Motley Fool Money. Joel O'Leary has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

Most humans think linearly -- in a straight line. So it's hard to imagine how saving $12 per day could ever amount to much. Over 30 days, it's just $360.

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But money saved over time actually grows exponentially -- like a curve that ramps upward. It starts small and slow, but ramps up over time until it skyrockets.

The truth is, $12 a day can grow to over $489,000 after 30 years. Stick with it for 40 years, and you're looking at more than $1.1 million.

Here's how -- and the easiest places to start saving today.

What $12 per day can grow into

Let's assume you saved $12 per day, and put it all into an investment account growing at an average annual 8% return.

Here is how much it could grow to over time:

The reason I use an 8% return is because it's a conservative benchmark for long-term, diversified investing -- slightly below the S&P 500's historical average of around 10% per year.

The point is, small habits can lead to massive results. The trick is to just start ASAP, be consistent, and invest in the right place.

Make it easy with index funds or a robo-advisor

Index funds are one of the most reliable long-term wealth builders. Especially low-cost funds that track major indexes like the S&P 500. They spread your money across hundreds of companies and grow as the market grows.

You don't need to be a stock picker or study the markets to be good at investing. In fact, you shouldn't try and outsmart the stock market. Taking a passive, long-term approach works out better for most people.

Set up automatic transfers

The hardest part of saving is staying consistent. That's where automation comes in.

Here are a few tools and systems to try which make things easier:

• Set up automatic transfers from your checking account to your investment account -- either monthly or each payday. Just pick a set amount (e.g., $360 per month) and stick with it.
• If your job offers a 401(k) plan, use this to invest a portion of each paycheck. The money will be taken out and invested automatically, without you having to think about it.
• If you can, increase your contributions every time you get a raise, bonus, or cut a recurring expense. This will accelerate your growth and timeline.

When the money moves automatically, you won't miss it. It becomes just another “bill” -- except this one pays you later.

Small saving habits can change your life

I love this savings example because $12/day feels doable for most people. And once a savings habit is in place, you don't need to think about it. You can just keep living while riches grow in the background.

I'm super lucky -- my parents drilled this lesson into me at a young age. I'm 40 now and have already amassed a pretty large nest egg from slowly saving small amounts.

But it's never too late to start. Save what you can, set up an automated investing system, and repeat. Small amounts really do add up.

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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

I know, I know… Using your debit card is easy. It's familiar. It keeps you out of credit card troubles. I totally get it.

Looking for a secure place to grow your savings? See our expert picks for the best FDIC-insured high-yield savings accounts available today - enjoy peace of mind with competitive rates.

But seriously, if you're still using a debit card to pay for travel stuff -- like flights, hotels, or rental cars -- you might be unknowingly leaving hundreds (or even thousands) of dollars on the table.

Not to mention, you could be missing out on some other perks and protections that can save your trip if things go sideways.

Here's everything you need to know -- and how to switch things up without overcomplicating your life.

Credit card rewards can offset your entire trip

Let's talk numbers. Many of the best travel cards offer anywhere between 2% to 5% back in rewards on travel-related purchases. That may not sound like much -- until you add it all up…

Say you spend $3,000 on flights, hotels, and food during a single trip. That could net you an easy $60 - $150 or more in rewards, depending on the card you have.

And that's just for a single trip! If you're traveling multiple times a year, and using the card on regular purchases, it's easy to rack up over $500 in annual travel rewards.

Debit cards don't offer anything close to this in rewards.

If you're looking for an easy starter travel card, check out this crowd favorite from Chase. I've personally used it for years, and right now it comes with a massive welcome offer for a limited time.

Built-in protections can save your trip (and your wallet)

Beyond points, another huge benefit of travel cards is built in protections and insurance.

Here are just a few of the protections you can get when you book travel with the right cards:

• Trip cancellation or interruption coverage: Get reimbursed if your trip gets delayed or canceled for covered reasons
• Lost luggage reimbursement: Receive money if your bags go MIA
• Rental car insurance: Decline the rental company's pricey coverage and still be protected
• Emergency assistance: Access help abroad, from medical referrals to travel coordination

If you book travel with a debit card, you probably won't get any of these. That means if your plans go sideways, you're likely on your own -- financially and logistically.

How to switch smartly (and maximize your rewards)

Here's a simple four-step way to dip your toe in the credit card rewards pool:

1. Pick a starter travel card -- Here's our best travel cards list. You can't go wrong with either of the top two.
2. Start with travel bookings -- Use this credit card only when buying flights, hotel stays, or rental cars.
3. Pay it off right away -- Treat it like a debit card by paying the balance in full after each use.
4. Track your rewards -- Use the issuer's portal or app to see how quickly your points add up.

This strategy gives you all the best rewards, protections, and perks, without risking credit card debt or overspending.

Interested in even more travel perks, like VIP status upgrades or lounge access? Compare all our top-rated travel credit cards here for 2025.

You're booking travel anyway. Might as well earn rewards by using different cards. Your next trip could pay for your next-next trip. Just sayin'!

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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.JPMorgan Chase is an advertising partner of Motley Fool Money. Joel O'Leary has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

On average, full coverage car insurance in the U.S. costs about $2,680 a year (that's $223 a month.) But for minimum coverage, that average drops to around $802 a year ($67 a month), according to Bankrate.

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Keep in mind, those are just averages. Your premiums could be a lot lower (or higher) depending on where you live, what you drive, your driving history, and more.

So how do you know if you're overpaying? Here's what to know and how to check.

How do you compare to the national average?

I'll go first. My full coverage premium right now is $1,047 per year. I live in California, have an excellent credit score, drive a minivan (dad mode), and only drive about 6,000 miles a year.

I pay less than half the national average for car insurance. But it didn't happen by accident. I keep a clean driving record and credit profile, and I shop around rates pretty often.

And trust me -- shopping around once in a while really pays off. Here's a free tool to compare rates from the top insurance companies.

You could save hundreds, just by checking what's out there.

What affects your car insurance rate?

There's a long list of factors that impact your auto insurance premium. Some of them you can control, and others you can't.

Here are the big ones insurers look at:

• Your location: Rates vary dramatically by state and even ZIP code. Michigan drivers, for example, pay more than twice as much as people in Vermont.
• Driving record: Accidents, speeding tickets, or DUIs can spike your rate for years.
• Vehicle type: Minivans and sedans are typically cheaper to insure than sports cars or luxury vehicles.
• Credit score: In most states, a higher credit score means a lower insurance premium.
• Annual mileage: Less time on the road usually equals lower risk (and cheaper coverage).
• Coverage level: Full coverage costs more than minimum coverage, but it offers far better protection.
• Deductible amount: Choosing a higher deductible can lower your premium.

I know, that's a lot to keep track of. But understanding the dials you can turn gives you the best shot at lowering your rate.

It pays to shop around

Consumer Reports recently found that 30% of car owners switched insurers in the last five years, and the median savings for those who did was $461 per year.

Here's the thing, though: You can't just sit around and wait for a discount.

If you want a lower premium, you've got to ask for it. And the only way to save is by shopping around and getting new quotes.

Personally, I shop around at least once a year. More often than not, I confirm that I already have the best deal for me. And it makes me feel good knowing I'm not overpaying.

But then there are times when I save a bunch of money for the exact same policy!

Bottom line: Don't wait for your renewal date. Check out this free tool to compare rates from the top insurance companies. It only takes a few minutes, and you could save hundreds!

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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

Top 6-month CDs are still paying around 4.00% APY as of right now. But that may not last much longer. In its June meeting, the Federal Reserve held interest rates steady, with the next policy decision expected in late July.

Looking for a secure place to grow your savings? See our expert picks for the best FDIC-insured high-yield savings accounts available today - enjoy peace of mind with competitive rates.

Still, many banks have already started quietly trimming CD and savings rates in anticipation of potential cuts later this year. Even without a formal Fed move, yields could continue to slip.

If you're thinking about locking in a short-term CD, now may be your best shot before rates trend lower.

Why a 6-month CD could be the sweet spot

Short-term CDs let you lock in a fixed return, but still give you access to your cash relatively soon.

It's a step up from a high-yield savings account (which can change rates anytime) but doesn't require tying up your money for years.

That's especially helpful in uncertain markets or if you think you'll need your funds soon.

Right now, some of the best CD rates are up to 4.00% APY on 6-month terms. That's about $200 in interest on a $10,000 deposit, and you'd get your cash back before Christmas!

Consider CD laddering with different terms

If you're working with a larger balance, you might want to spread your cash across multiple CDs with different timeframes.

This strategy is also called CD laddering. It's the perfect way for people to lock in top rates, and stagger maturity dates so they have regular access to their cash.

For example, here's a simple CD ladder spreading $40,000 across four CDs with a $10,000 in each:

Over a two-year period, you could earn $1,815 in interest, while still having access to your initial $10,000 deposits every six months.

By the way, if the Fed begins cutting rates (as is expected to happen before the end of the year), it's likely that all CD terms will drop -- not just the short-term ones. So no matter the CD term you're interested in, it might be smart to lock in your rate sooner rather than later.

When a CD might not be the right fit

CDs are great for money you won't need to touch. But if there's any chance you'll need access before the term is up, they can be a bit restrictive.

Most banks charge a penalty for withdrawing early from CDs. Usually, the fee is forfeiting anywhere from three months to the entire amount of interest earned.

So if flexibility is a priority, a high-yield savings account (HYSA) could be the better fit.

HYSAs are also offering around 4.00% APY right now, but they are exposed to instant rate changes whenever banks want to implement them.

If you value access over a fixed return, a HYSA may be the safer move. (I personally fall into this camp).

Final thoughts

Opening a 6-month CD now could be a smart way to lock in a solid short-term return before rates decline. It's safe, predictable, and doesn't tie up your money for too long.

And with the Fed hinting at rate cuts as early as this fall, this might be your last window to capture top-tier CD yields. Compare today's best 6-month CD rates and start earning more on your cash.

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Click here to read our full review for free and apply in just 2 minutes.

We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

Most people stash their emergency savings in a high-yield savings account -- which is a solid idea. But my buddy stores his $60,000 in savings a different way.

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He built a CD ladder that pays him every month like a self-funded paycheck.

His logic is that if (when) something bad happens -- like losing his job -- he probably wouldn't need all $60,000 on day one. He'd just need a few grand each month to cover bills.

So he split his emergency fund into 12 $5,000 CDs, each with a 12-month term, staggered monthly. That way, one CD matures every month, and he can roll it over or cash it out as needed.

It's a simple move, but it locks in a higher interest rate for most of his cash than a savings account could.

The setup: 12 CDs, 12-month terms, $5,000 each

Here's the gist of how his CD laddering strategy was built:

• He split $60,000 into 12 separate CDs, each with a $5,000 deposit.
• He bought all the CDs on a rolling monthly basis.
• That means one CD matures each month, freeing up $5,000 (plus interest).
• When a CD matures, he simply rolls it into a new 12-month CD at the current best rate. (Or he can use it in case of emergency.)

It's quite genius, actually. He has regular access to his cash, pays no penalties or fees, and earns the best available APYs for 1-year CDs every month.

Want to copy this setup?

So how much does he earn?

Let's do the math based on the best 1-year CD rates right now -- we'll use a 4.00% APY as a rough average.

Each $5,000 CD earns around $200 per year, or roughly $16.67 per month.

Multiply that by 12 CDs, and he's bringing in around $200 per month in passive income, or $2,400 per year.

Truth be told, he began this ladder strategy a couple years ago when rates were even higher. So he's probably earning even more because some of his older CDs are probably still paying higher rates.

That's the beauty of laddering, and why it's important to lock in good rates before they drop. The Federal Reserve is meeting again on June 17-18, and if they decide to cut rates, today's top CD offers could disappear fast.

Is CD laddering right for you?

I'll be honest -- personally, I don't keep my own emergency fund in a CD ladder. I use a high-yield savings account.

I know CDs might pay me a tiny bit more in interest. But I feel better knowing I can access all of my cash at any moment if I need to. It's a security thing, I guess.

That said, CD laddering makes a ton of sense for people who want to earn more on their cash without giving up all their access. Especially if you've got a large emergency fund or money earmarked for a goal that's still a few years out (like buying a house).

If you're sitting on a chunk of cash and want to earn more without taking on risk, a CD ladder could be your next smart move. It's low-effort and low-risk, and you can customize it however you want.

Start by exploring the top CD rates available right now -- our team updates the list regularly so you can lock in a great APY before rates drop.

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Right now, I have about $25,000 sitting in a high-yield savings account earning 4.50% interest. If I lost my income tomorrow, that cash pile would help cover my family's bills, groceries, and other expenses without going into debt.

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But is it enough to protect me in a recession? What's the ideal savings number to help us ride out a lengthy rough patch?

A six-month buffer is ideal

If you lost your job today, how long would it take to find another one?

In a strong economy, it could be fairly quick. You might land a new gig within a month or two, or pick up some freelance or side work to keep money flowing.

But during a recession, when layoffs spike and hiring slows, finding work could take much longer.

In fact, during the 2007-2009 Great Recession, the median unemployment period was 25.2 weeks (nearly six months), according to the Bureau of Labor Statistics. And when jobs are scarce, even gig work can dry up.

That's why personal finance expert Robert Brokamp recommends folks lean toward a larger savings cushion:

Basically, saving six months of expenses gives you more time to find a job if the economy goes south.

Here's what six months of savings looks like at different spending levels:

Where to keep your emergency savings

This part matters more than most people think.

Keeping your emergency fund in a safe place that's easy to access is important. But you also want to earn maximum interest on your cash.

That's why a high-yield savings account (HYSA) is the best spot. HYSAs earn about 10 times the national average APY. And today's top accounts are offering rates up to 4.40%.

HYSAs are also FDIC insured, up to $250,000 per depositor. So you can relax knowing your money is federally protected, even if the bank you're with goes out of business.

A barebones budget can help

My wife and I usually spend about $6,000 to $7,000 per month. So, at our normal spending rate, our $25,000 emergency fund would last us around three to four months.

But here's the thing. If I actually lost my job and couldn't find work right away, we could tighten up our spending quite a bit. We could pause travel, cut subscriptions, and put a temporary freeze on non-essentials. That would shrink our monthly spending significantly, maybe to $4,500 per month. Our emergency fund would last us closer to six months then.

This stripped-down version of our expenses is called a barebones budget. It's a super useful tool to have in your back pocket.

Pro tip: Some banks offer built-in budgeting tools that help you track your spending and flag unnecessary expenses that can be cut fast.

Tips to build up your recession fund faster

If you don't have a full six months of savings currently, here are a few moves that can get you there faster:

1. Set up automatic transfers. Each payday, move a bit of money from your checking account into savings. Then you'll be stashing money without even thinking about it.
2. Save any windfalls. Bonuses, tax refunds, or birthday cash from grandma…put it all right toward your savings goal.
3. Cut back temporarily. Skipping one dinner out per week could save you $200 a month or more. Believe me, the sacrifice will be worth it when you're sitting on a full emergency fund.
4. Get the highest APY you can. Park your savings in an HYSA with one of the best available APYs. All that interest helps your fund grow faster.

Progress feels slow at first, but momentum builds fast.

Recessions are unpredictable. Having a solid cash cushion means you don't need to panic-sell investments or swipe a credit card when life gets rocky.

So whether your number is $5,000 or $50,000, start stacking that fund today. The peace of mind is worth every penny.

No one ever regrets having extra cash in a crisis. Explore the top high-yield savings accounts today and start earning up to 4.40% APY, with zero risk and full liquidity.

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My wife and I became millionaires fairly early in life. And while you might think we won the lottery or were early crypto adopters, the truth is painfully unsexy…

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We just started automatically investing a portion of every paycheck, stuck with it, and let time do the rest.

That one habit changed everything for us. And it's the exact same step I recommend to literally anyone who wants to retire wealthy.

How a tiny investment grows into $1 million

One of the biggest complaints I hear people saying is, "I can't save very much."

But what they don't realize is how little amounts can grow to massive numbers over time. It's all due to compound interest.

Here's an example using $300 per month. If you invested each month with an 8% average annual return (a common long-term stock market estimate), here's how it would grow over time:

That's just ten bucks a day. And if you can double that savings to $600 per month, you will double all those future values.

You can start with even less. The habit matters more than the amount. Over time, as you earn more or have more breathing room, you can increase your contributions.

Even better, automate your investments. If money goes straight from your paycheck to your 401(k), you'll never have a chance to spend it -- and you probably won't miss it.

Not sure how to get started? With our partner, SmartAsset, you can get matched with up to three fiduciary advisors so you can get professional advice.

Best "set-and-forget" investing accounts

If you want to build wealth on autopilot, these accounts make it easy to invest consistently and forget about it until retirement.

401(k): Invest straight from your paycheck

If your job offers a 401(k), that's usually the easiest place to start. Money gets taken out of each paycheck and invested before it even hits your bank account. Plus, many employers offer a match -- and that's free money.

A Roth or traditional IRA

A Roth IRA is great if you're still in a lower tax bracket, because withdrawals in retirement are tax-free. A traditional IRA gives you a tax deduction now, but you'll pay income tax on your withdrawals later.

Either way, IRAs are simple to set up and perfect for building that automatic investing habit. Open your first IRA with one of these top-rated brokers.

A regular brokerage account

I encourage everyone to prioritize their 401(k)s and IRAs, because they have tax advantages and are built for retirement saving. But if you've already maxed those out, go with a standard brokerage account.

No matter what account you invest in, make sure to set up those recurring transfers.

If you're consistent, the wealth will show up. Maybe not tomorrow, maybe not next year. But eventually compound interest will kick in and take over -- just like it did for me and my wife.

Want to talk with a professional? A short questionnaire from our partner, SmartAsset, helps match you with up to three fiduciary financial advisors, each legally bound to work in your best interest.

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Think for a second: How do you win a game of Monopoly?

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Do you circle the board as fast as you can, refusing to buy anything, and only focus on stacking up cash?

Of course not. You buy properties. You invest early and get your hands on as many assets as possible. It's a race to build hotels and collect income. The players that buy nothing and hoard cash? They lose.

Well, the same idea applies to retirement and real life. Saving is crucial. But investing is what builds real wealth.

Why saving alone won't get you there

Let's say you save $500 per month, and put all of that money into a checking account at the bank. Do you know how long it will take to save up $1 million?

It will take 166 years. Not kidding.

Simply stashing money in a bank account makes it incredibly difficult to reach your retirement goals. But when you invest your money and activate compound interest, your wealth grows like a snowball.

Now let's look at what investing can do with $500 per month. Instead of saving in a checking account, let's say you invest all those dollars in a 401(k) or IRA. With an 8% average annual return (I'll explain why I chose this rate later), reaching that $1 million would only take 35 years.

That's a difference of 131 years!

You can even reach $1 million much sooner, by either saving more or getting a higher return on your investments. The reason I used an 8% annual growth rate is because it's a conservative estimate, slightly below the S&P 500 Index's long-term average of about 10%.

By the way, if you're confused about all this investing stuff, it never hurts to connect with an advisor. A short questionnaire from our partner, SmartAsset, helps match you with up to three fiduciary financial advisors, each legally bound to work in your best interest.

Automate everything

One of the best money moves I ever made was automating my retirement contributions.

Every paycheck, a little bit of money gets transferred into my investment accounts, without me ever having to think about it. And over the years, those small, consistent deposits have quietly grown into big balances.

If your workplace offers a 401(k) plan, start there. And if they offer a match, grab it! That's free money. Another easy option is opening an IRA and scheduling monthly transfers.

Experts recommend saving 10% to 15% of every paycheck. But honestly, I encourage people to save even more if they can.

Keep it simple with index funds

I'm a huge fan of index funds. These are low-cost funds that track big chunks of the market, like the S&P 500 Index.

That means when you invest in one fund, you instantly own shares of hundreds of companies -- without having to pick and choose.

Another easy setup is target-date retirement funds. They're like all-in-one portfolios that invest your money in a mix of stocks and bonds, and automatically adjust that mix as you get older.

And if you want a completely hands-off experience, it might make sense to work with an advisor. This no-cost quiz from our partner, SmartAsset, makes it easier to find a fiduciary financial advisor.

Go build your Monopoly board

Saving for retirement is a long-term game.

Just like collecting properties in Monopoly, the key is to keep stacking assets over time. Those investments will start paying dividends, growing in value, and snowballing into real wealth.

To make it easier, set your contributions on autopilot. This makes investing a habit, so all of your dollars are working hard while you continue living your life.

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Some of the top CDs are paying well over 4.00% APY right now -- a rare treat if you've been stuck earning pennies in a basic savings account.

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But with the Federal Reserve hinting at rate cuts later this year, you might be wondering: Should you lock in today's high rates? Or is it smarter to keep your cash flexible?

Let's break down the latest CD rates, a smart strategy for investing in CDs, and how high-yield savings accounts (HYSAs) stack up today.

Best short-term CD rates in May 2025

Right now, short-term CDs are offering higher yields than their longer-term counterparts.

Here's how the top shorter-term CD rates stack up as of May 2025:

If the Fed lowers rates soon, we'll likely see these rates drop quickly. So if you've got cash you don't need for the rest of 2025, it might make sense to lock in a great rate while you can.

Explore all the top CDs of May 2025 to see the latest high-rate options before they disappear.

A CD ladder can give you more flexibility

If you're worried about locking up cash for too long, CD laddering can be a good strategy.

It works like this:

• Start by splitting your money into equal parts. For example, you might split $20,000 into four lots of $5,000.
• Next, open several CDs with staggered terms. For example, one for 6 months, one for 12 months, one for 18 months, and another for 24 months. Put $5,000 into each.
• As each CD matures, you can either cash it out if you need the money, or roll your funds into a new long-term CD to keep the ladder going.

Laddering allows you to lock in today's great rates, but gives you regular chances to change your strategy (or lock in higher rates if they come available).

If you're building a ladder, short-term CDs are your best building blocks right now thanks to their higher APYs.

High-yield savings accounts are great too

If locking up your money makes you nervous, a high-yield savings account might be a better home for your cash.

Right now, the best online HYSAs are paying around 4.00%, which is only slightly lower than what you can earn with short-term CDs.

The main downside is: HYSA rates are variable. If the Fed cuts rates, your savings rate will follow suit, unlike your CD rate that's locked in.

Personally, I keep about $25,000 in an HYSA. For me, it's worth a little less yield to know I can access my cash instantly if something unexpected comes up.

Don't miss today's high rates

CDs are absolutely still worth considering in May 2025 -- but only if they fit your savings timeline. If you can afford to lock your money up for between six and 18 months, CDs paying over 4.00% could be an awesome low-risk win.

But if you need fast access to your money, a high-yield savings account is the safer, smarter play.

Either way, don't let your cash sit in an account earning 0.01%.

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Whenever I get a new credit card, the first thing I do is set up auto-pay.

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It's a no-brainer -- it guarantees I'll never miss a payment by accident, and the bank just pulls the money straight from my checking account.

But choosing the wrong auto-pay settings (or just accepting the bank's default) can cost you big time. If you're not careful, you could end up only paying the minimum due -- while the rest of your balance racks up interest.

Here's how to make sure auto-pay is actually working for you.

Understanding your auto-pay options

When you set up auto-pay, most banks offer a few choices:

• Pay the minimum payment (usually 1% to 3% of your balance)
• Pay the statement balance (everything you owed last billing cycle)
• Pay the current balance (everything you owe up to that time)

If you're not paying attention, it's really easy to choose "minimum payment." But this means over 95% of your statement rolls over to the next month. Next, interest is charged, typically compounding daily, and things get ugly real quick.

Best practices when setting up auto-pay

Here are a few tips for when you set up auto-pay:

1. Choose "pay statement balance" (if possible). This pays off what you owed last cycle, on time, every time. You'll avoid paying any interest, and you don't need to pay for today's new purchases yet.
2. Set up "pay current balance" if you're a heavy spender. This will pay everything you owe -- including recent charges -- so you're fully caught up. As a side benefit, this keeps your credit utilization as low as possible, which helps your credit score.
3. Double-check your bank's default setting. Before finalizing, make sure you're not accidentally locked into minimum payments.
4. Set a reminder a few days before due dates. Even with auto-pay, it's smart to eyeball your checking account balance and make sure you've definitely got the funds to cover your payment.

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What happens if you only pay the minimum

Here's an example of the consequences of only making minimum payments:

My wife and I usually put about $3,500 a month on our credit cards. Let's say we only paid the minimum -- maybe 2% of the balance, or about $70.

The rest of the balance would roll over and start racking up interest. My credit card APR sits at about 22% right now, so this means I'll pay $63 in interest the first month.

And if we kept rolling that balance over without paying it off? We'd fork over hundreds -- even thousands -- of dollars in interest over the course of a year (while also racking up a ridiculous balance!)

Smart habits, bigger wins

Setting up auto-pay the right way isn't just about avoiding late fees.

It's a key part of building smart credit card habits. Responsible usage keeps you out of debt and puts you in full control of your cash.

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A friend of mine said the safest money move right now is to buy Bitcoin. I nearly spit out my coffee!

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If you're looking for actually safe places to park your money -- the kind with predictable returns and no emotional rollercoaster -- this list is more your speed.

Here are four smart places to stash your cash (no crypto required).

1. High-yield savings accounts

These are like regular savings accounts -- but earn up to 10X the national average interest rate.

High-yield savings accounts (HYSAs) are FDIC insured, and right now can be found with rates as high as 5.00% APY.

But for example purposes, we'll use a more common APY of 4.10% for our calculations. To put this into dollars, here's what earnings could look like after 12 months at various balances:

Unlike my buddy's Bitcoin, there's zero risk to your principal. With FDIC insurance, your money stays safe. Even if the bank goes under, you're protected up to $250,000 per depositor, per institution.

HYSA rates do ebb and flow with the economy and Federal Reserve changes. But movement is slow and often predictable.

2. Certificates of deposit (CDs)

CDs are like the "set it and forget it" crockpot of saving. You lock in a great rate, walk away, and come back to guaranteed growth.

In May 2025, short-term CDs (3- to 12-month terms) are offering rates around the 4.00% mark, with some online banks offering up to 4.65% APY. These are ideal if you anticipate needing access to your funds in the near future.​

On the other hand, you might prefer locking your money in for a longer term and accepting a slightly lower rate. Mid-term CDs (1 year to 3 years) are yielding between 3.25% and 4.00% APY. Locking in these rates now can be a smart move, especially if interest rates decline in the coming months.​

Keep in mind that CDs do come with early withdrawal penalties. So, choose a term that aligns with your financial goals and timeline.

3. Treasury bills (T-bills)

T-bills are like super-safe IOUs from the U.S. government. You give them money now, and they promise to pay you back later, with interest.

As of May 2025, short-term T-bills (three to six months) are yielding around 4.30% APY.

How they work: You buy T-bills at a discount (say, $975), then get the full $1,000 back when they mature in a few weeks or months. That difference is your interest.

One cool thing about T-bills is that the interest you earn isn't taxed at the state or local level -- you only pay federal taxes. This is a big win if you're in a higher tax bracket.

You can buy T-bills straight from TreasuryDirect.gov, or invest through a brokerage.

4. Money market funds

Imagine taking CDs, T-bills, and other super-safe investments and smooshing them together into one big fund. That's basically what a money market fund is.

You get to spread your risk across many different short-term assets, and reap the blended yield of everything.

In May 2025, many money market funds are paying between 3.45% and 4.24%.

Something to check with your current broker: Many firms automatically "sweep" your uninvested cash into one of these funds. This is a great feature to earn the most on your cash while it's sitting idle.

Read all about one of our favorite brokers that does this and learn how its low fees and simple approach make it a great choice for protecting your savings.

Keep it boring (and safe)

If you're like me -- and not taking financial advice from your Bitcoin-loving buddy -- then you know that boring and proven methods are a better way to keep your cash safe.

HYSAs, CDs, money market funds, and T-bills all offer steady, low-risk returns that won't keep you up at night.

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Just like Barry White says, "Too much of anything ain't good for you, baby." And yep -- that even applies to hanging onto too much cash. If you've got over $50,000 sitting in the bank, it's time to rethink your financial game plan.

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Keeping some cash savings is smart -- like three to six months worth of expenses in an emergency fund.

But hoarding excess cash could actually be hurting you and costing you thousands of dollars every year.

Saving vs. investing

A lot of people use the terms "saving" and "investing" like they're the same thing. But there's actually a big difference.

• Saving is for short-term goals and emergencies. Think: your emergency fund, a vacation next year, or a new car. This money needs to be kept in cash for quick access.
• Investing is for long-term goals. Think: retirement, growing wealth, or sending your future kid to college. This money should be invested, and not touched for decades.

Both are important. And balance is key.

How much cash should you be holding?

The general rule of thumb: You typically want three to six months' worth of essential expenses in an emergency fund.

If you're saving up for a home down payment, or large purchase in the next few years, that money can be kept in cash too.

But, while it's sitting idle, it should be earning maximum interest.

I use a high-yield savings account to keep my $25,000 emergency fund handy and secure. Right now I earn an APY of 4.50%, which will make me over $1,000 in interest this year. Not bad!

High-yield savings accounts are FDIC insured, you can withdraw your money at any time, and you'll earn top interest rates.

Where to put your excess cash

Anything beyond your emergency fund can be invested for the long term. Here are some places to put that money to work.

401(k) or IRA:

A 401(k) is typically offered through your employer, while an IRA is something you can open yourself. Both accounts offer powerful tax advantages that can help your money grow way faster than it would in a regular bank account.

Inside of these accounts, you can invest in broad index funds or target date funds. These typically have a low expense ratio, and are highly diversified.

Regular brokerage account

A brokerage account doesn't offer tax advantages. But it does have much more flexibility for investment options, and better access to your money. Inside of a brokerage account you can invest in stocks, ETFs, short-term bonds, and more -- there is a lot of choice.

Investing always carries risk. But if you're patient and learn to invest wisely, the long-term growth can yield mind-blowing results.

Still not sure where to stash your emergency fund? Check out our list of the best high-yield savings accounts for the opportunity to earn more than 10 times the national average rate today.

Pay off debt (high interest first)

Still carrying a balance on a credit card or personal loan? Using excess cash to wipe out debt could give you a "guaranteed return" equal to your interest rate.

For example, if your card is charging 20% APR, paying it off is like instantly earning 20% risk free. Tackling lower-interest debt can be smart too. It's better than having cash sit idle and earning nothing.

The true cost of excess savings

Let's say you're holding an excess $30,000 in cash, on top of your emergency fund.

Here's what growth would look like in these accounts:

• Savings account earning 4.00% APY (typical for today's top HYSAs)
• Investment account averaging 8% annual returns (This is a rough example and actually a conservative estimate based on the S&P 500's history)

Compound interest is wild. A tiny rate difference -- over decades -- makes a massive difference in how much money you end up with. Stop waiting and start making your money work harder for you today.

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At one point, I had over $20,000 sitting in my regular checking account earning just 0.01% APY. That's a whole $2 per year in interest. But you know what happened when I wised up and switched to a high-yield savings account (HYSA) paying over 4.00%? I earned almost $800 for the year.

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This is a common mistake. In fact, a recent survey found 82% of Americans don't utilize high-yield savings accounts. Choosing the wrong type of bank means leaving hundreds -- or thousands -- of dollars on the table.

If you're sitting on a sizable cash pile, here are three common mistakes you should avoid when picking a place to store it.

1. Settling for an ultra-low APY

According to FDIC data, the national average interest rate on a checking account is 0.07% APY. That's not just low -- it's microscopic.

To be fair, checking accounts aren't built as savings vehicles. They're meant for everyday banking and money management.

Meanwhile, for long-term cash storage, online high-yield savings accounts are currently offering 4.00% to 4.50% APY. The difference is huge. Even at 4.00%, you'd be earning nearly 60 times the average checking account APY.

Here's a 12-month comparison:

To do this week: Check your bank statements and see how much interest you earned last year. If it was less than a few dollars, you owe it to yourself to switch to a higher growth account!

2. Overlooking hidden fees

Even if your bank advertises "free" savings accounts, they may be quietly charging:

• Monthly maintenance fees for low balances
• Paper statement fees
• Withdrawal limits or penalties
• Transfer fees between accounts

If your savings are growing by 1%, but you're losing $10/month in fees? That could be a net loss.

Many online banks have no monthly fees, no minimum balance requirements, and free transfers. That means more of your money stays exactly where it belongs -- in your account, working for you.

3. Stashing your savings somewhere that's not FDIC insured

It's easy to assume your money is always safe in a digital account. But that's not always the case!

Many popular payment apps (like PayPal, Venmo, and Cash App) aren't FDIC insured by default. That means if the company goes under, you could lose your money.

Flashy fintech accounts and crypto platforms don't offer the same protections as a traditional bank or credit union.

FDIC insurance means that if the bank fails, you still get your money back. Insurance is up to $250,000 per depositor, per institution.

Don't worry -- ALL of the high-yield savings accounts we love and recommend are FDIC members. Your savings are safe!

Your next smart move

Don't settle for a sub-par bank account -- especially if you have a high balance ($5,000 or more) that could be earning you a decent amount in interest.

Take 10 minutes today to investigate your current savings account. Look for a competitive APY, no sneaky fees, and full FDIC insurance. If it doesn't check all three boxes, open a new HYSA today and get your dollars working harder for you.

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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Joel O'Leary has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends PayPal. The Motley Fool recommends the following options: long January 2027 $42.50 calls on PayPal and short June 2025 $77.50 calls on PayPal. The Motley Fool has a disclosure policy.

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Most Americans still park their savings in traditional checking or savings accounts earning just 0.07% APY. That means if you have $30,000 sitting in there, it's making about $21 a year. That's less than the price of two movie tickets -- for the whole year.

Looking for a secure place to grow your savings? See our expert picks for the best FDIC-insured high-yield savings accounts available today - enjoy peace of mind with competitive rates.

What people should be doing is keeping their cash in a high-yield savings account (HYSA). With APYs up to 4.40%, that same $30,000 could earn over $1,300 a year, without any added risk.

Let's take a closer look at what you stand to gain by switching to a high-yield savings account.

What $30,000 earns in high-yield savings (vs. traditional accounts)

I've done the calculations for a few different scenarios to show you how much $30,000 would earn over the course of a year in various account types.

Here's a simple comparison based on national average checking and savings account rates, plus a competitive HYSA rate you can find today:

That's a $1,299 difference between a regular checking account and a top-paying HYSA. Nothing to scoff at.

Shopping around for a high-yield savings account

Personally, I was pretty nervous when I first opened an online HYSA. Transferring $30,000 to any new bank requires a bit of research.

Here's what I look for before moving my money:

• A high APY -- Right now, 3.60% and up is the benchmark for competitive rates
• No monthly fees -- Junk fees are a pet peeve of mine
• FDIC insurance -- This protects your cash up to $250,000 per depositor, per bank
• Fast transfers -- You'll want access to your money if you need it quickly

Some accounts may also offer welcome bonuses for new customers! So definitely keep an eye out for those.

Put your money to work today

Checking accounts are convenient. But they're not built for storing cash long term.

If you've got $30,000 sitting in a checking account, it's quietly costing you over $1,000 each year.

Your mission this week: Open a high-yield savings account and put all your hard-earned dollars to work.

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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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With CD yields still hovering in the 4.50% range, you really need to be picky when choosing where to put your cash.

Looking for a secure place to grow your savings? See our expert picks for the best FDIC-insured high-yield savings accounts available today - enjoy peace of mind with competitive rates.

Especially if you're cashing out of an existing CD. If you don't take action when a CD matures, your bank might quietly roll your funds into a new CD -- locking them up again, potentially at a lower rate.

If you're cashing out a CD soon, avoid these top mistakes.

1. Letting your bank auto-renew your CD

Most CDs have something called a "grace period." This is usually a seven- to 10-day window after the maturity date in which you can withdraw your money without penalty.

Guess what happens if you miss this grace period? Banks typically auto-renew your CD -- which may (or may not) be in your best interest.

Even worse: Not all banks send you a reminder!

While auto-renewal isn't always bad, don't assume that it's the best option forward.

What to do instead:

• Set a calendar reminder with your CD maturity date and the grace period window.
• Log in to your account the day it matures and choose "withdraw" or "close CD" (wording varies a little by bank).
• Make a quick decision about the next best place to put your money.

If you want to open a new CD, be sure to shop around for the best available CD rates across all banks.

2. Letting their money sit idle after withdrawal

A lot of people cash out their CD into a checking account, then think, "I'll just wait a few days and figure out my next move later." Then six months slip by and they've missed out on hundreds in earning potential. Don't fall into this trap!

A good practice is to withdraw money directly into an HYSA during the grace period. That way if you don't have an immediate next step lined up, you'll still be earning competitive interest on your cash.

Whatever you do, don't request a check withdrawal and then wait months to cash it. Or cash money out into a low-APY savings account earning pennies. Be proactive and make a plan for earning the most you can, as soon as you can.

3. Reinvesting without rate shopping

If your CD was earning 1.00% or 2.00% when you opened it, things have changed big time since then.

As of April 2025, many high-yield CDs are paying well over 4.00% APY.

Here's a quick 12-month yield comparison, based on a balance of $20,000:

Don't just accept the rates offered by your current bank. Shop around, because there's likely something better available elsewhere.

Want to see the latest rates? Check out our list of the top CDs for April 2025.

4. Cashing out early without understanding the penalty

If your CD isn't quite mature yet, resist the urge to cash out early. That's because banks charge a penalty for doing so -- which means you might forfeit three to 12 months' worth of interest.

Let's say you're earning 5.00% APY on a $10,000 CD and you withdraw three months early. You could lose $125 or more in penalties -- which might wipe out a good chunk of your earnings.

Make your exit count

Cashing out a CD shouldn't be an afterthought. Stay ahead of the due date by researching the best options moving forward and making an action plan.

And definitely don't let your bank auto-renew your CD into a lower rate. There are way better options, and moving that money only takes a few minutes of your time.

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Click here to read our full review for free and apply in just 2 minutes.

We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Joel O'Leary has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.

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The average checking account earns a measly 0.07% APY. That means if you have $10,000 sitting in your checking account, you'll earn a whopping $7 in interest for the year. Ouch! That can't even pay for a delicious craft Hazy IPA at my local brewery.

Looking for a secure place to grow your savings? See our expert picks for the best FDIC-insured high-yield savings accounts available today - enjoy peace of mind with competitive rates.

High-yield savings accounts (HYSAs), on the other hand, can offer up to 4.40% APY. Interest earned in a year would be over $400… Which would buy me three to four delicious Hazy IPAs -- per month, for a year!

If you have $10,000 or more sitting in checking, it's time to put that money to work in a better type of account.

How much $10,000 could be earning

So, how much could that $10,000 that's languishing in your checking account be earning you elsewhere?

Here's the math comparing interest rates across different account types, at various balances:

With a $10,000 account balance, you're looking at a $441 difference in interest just for moving your money into an HYSA. No investing, no risk. Just smarter saving.

Why most people keep too much in their checking accounts

Most of us were taught that our checking account is the default place for our money. It's where your paycheck lands. It's what your debit card pulls from. It's... easy.

But that convenience leads people to continue to build up savings amounts way higher than they should.

Traditional banks love this by the way. They make billions by keeping their customers' cash sitting in low-interest accounts, and never encourage people to move it.

In reality, there's no need to keep more than one or two weeks' worth of expenses in a checking account. As long as you've got enough to cover immediate bills, any excess cash is probably too much.

What to look for in a high-yield savings account

If you're ready to put your cash pile to work, here are some things to consider when evaluating high-yield savings accounts:

1. Competitive APY: Look for accounts offering 3.60% APY or higher. Rates change often, so it's worth checking every few months.
2. No monthly fees: You shouldn't have to pay to save. Plenty of online banks offer free accounts with no minimums or maintenance fees.
3. FDIC insurance: Make sure your money is protected and you're working with a reputable bank.
4. Easy transfers: You'll want quick access to your cash should you need it to cover large bills or if an emergency pops up. Typical transfer times should be one to three business days.
5. A great mobile app: This makes it easy to quickly log in and manage your money.

Our editorial team has spent hundreds of hours researching, reviewing, and testing the best savings accounts. Check out our best high yield savings accounts for April 2025.

Give every dollar a job

Checking accounts are perfect for daily use. Like for paying bills, buying groceries, and getting your paycheck deposited. But they're not built for growth.

Every extra dollar you have sitting idle, move it somewhere it can work harder for you. A high-yield savings account gives those dollars a job, while also keeping them accessible in case you need the money in a pinch.

Alert: highest cash back card we've seen now has 0% intro APR into 2026

This credit card is not just good – it's so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.