This post may contains affiliate links, which means I receive a small commission at no cost to you. Please read the full disclosure here.Updated – January 2018
With the Save Age Challenge in full swing, the first step to be successful is to open a separate savings account. I highly recommend opening an online account that is SEPARATE from your regular bank accounts.
Why? Very simple…
It is harder to access your money. Thus, harder to spend your hard earned money. Which means, you will see your saving progress more readily! One of the questions I hear often…
Where to save money and earn interest? What is the difference between saving and investments accounts? Let's dig in and answer those questions.
Just a note… all of these opinions are 100% my own and not sponsored by any of the below mentioned companies.
Where to Save Money and Earn Interest:
In today's market, the best place to save money and earn interest are one of two options either in a savings account or an investment account. There are two primary differences.
The first is savings accounts that are FDIC insured up to $250,000 whereas investment accounts are volatile. The second difference is the rate of return on the account. With saving accounts, most banks offer between .05% – 1.05% (maybe slightly higher for a Certificate of Deposit also known as a CD.
On the other hand, investment accounts are tied to the stock market growth and the investment is not guaranteed. Thus, the rate of return can be a roller coaster. Over the past 50 years, the stock market averages about 7%. More risk, more return.
Savings Account Recommendations:
Online banking is a growing trend because online banks can offer a higher rate of return due to lower overhead. Personally, I have used an online bank since college. One simple reason; I wanted to see my savings add up and to stop haste spending decisions. Just make sure the online bank is FDIC insured; this insures your bank balance up to $250,000. Honestly, earning anything over .25% APY is great in today's market! Online banking is one of the best places to earn interest with low risk.
For the Save Age Challenge, I am using Capital One 360. Right now, Capital One is offering a $25 bonus when you sign up with this link. Plus, there is no minimum requirement to earn 1.00% APY! I highly recommend Capital One 360!
Update for 2018 – this is the company I am using for the Save Age Challenge 2018!
Related Post: How Much to Save for Emergency Fund
Investment Account Recommendations:
Another option is to open an investment account. After we paid off $53,000 in student loan debt, I am ready to start trading again. This has been something I dabbled in for 15+ years. I am by no means a heavy trader; just for fun and to see a return. Personally, I have opened my account with Ally Invest and TD Ameritrade. So far, I am happy with my decision to use either company – TD Ameritrade or Ally Invest.
Ally Invest (formerly TradeKing) is an investment platform that is battling the top competition. They offer $4.95 flat rate stock trades. This is the lowest in the industry!! Many of the reviews on Ally Invest are extremely positive (plus I have been a happy customer, too). Before TradeKing sold their company to Ally Invest, their company model was focused on heavy use stock and option traders. Overtime, TradeKing has evolved and perfect for the everyday investor. Now Ally Invest at the helm, it will continue to be a sound investment platform with a well-known name. Start today and get Ally Invest.
Motif Investing is one of the hottest investment companies right now. The reason why is their portfolio trading. The provide the ability to trade stock as low as 33 cents per stock when you trade an entire portfolio of up to 30 stocks or ETFs in a single transaction for $9.95. Learn more about Motif Investing.
In order to save consistently on a regular basis, I highly recommend opening up a separate savings or investment account based on your preferences. Personally, I have used Capital One 360, TD Ameritrade, Ally Invest, and CIT Bank; I highly recommend any of these. Honestly, where to save money isn't as important as starting to save money. These are options of the best places to save money and earn interest. Open your account today and watch your savings grow!
Check out these simple, easy tips on how to save money every month.
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Disclosure – Any of these companies terms are subject to change without notice and we are not to be held liable if the terms have changed.