A savings account is often seen as a secure and accessible place to park your money. While it provides the advantage of liquidity, many people overlook the potential to maximize their earnings from a savings account. The good news? There are several smart strategies to grow your money without taking on significant risk. Here are six ways to earn better returns through your savings account.
- Choose a High-Interest Savings Account
Not all savings accounts offer the same interest rates. Some banks, particularly small finance banks, offer higher rates than traditional larger banks. Research and switch to a high-interest savings account that could provide significantly better returns. For instance, AU Small Finance Bank offers high interest rates, which can boost your savings with minimal effort.
Tip: Look for banks offering monthly interest payouts instead of quarterly for more frequent compounding of returns.
- Take Advantage of Promotional Offers
Banks often roll out special promotional offers, especially for new customers, that include higher interest rates or additional benefits. Keeping an eye out for these offers can help you take advantage of short-term rate boosts or other rewards that increase your earnings without requiring any extra effort.
- Link Your Savings Account with Fixed Deposits (FDs)
Many banks offer sweep-in or auto-sweep facilities, where excess funds in your savings account are automatically transferred to a fixed deposit (FD) when they exceed a certain threshold. This way, you benefit from the higher interest rates of FDs while maintaining the liquidity of a savings account. When you need funds, the bank automatically breaks the FD to meet your request.
- Use Overdraft Facilities Wisely
Some savings accounts come with overdraft facilities linked to your savings or fixed deposits. By keeping your account in good standing and avoiding the overdraft unless absolutely necessary, you continue earning interest on your savings and linked deposits.
- Maintain a Higher Balance
Many banks offer tiered interest rates, which increase as your balance grows. If you maintain a higher balance in your savings account, you might be able to take advantage of better interest rates. For example, some accounts provide higher rates once your balance crosses a specific amount, allowing you to maximize returns without moving your money around.
- Opt for a Savings Account with Monthly Interest Payouts
While most banks calculate and pay interest quarterly, some offer the advantage of monthly interest payouts. Monthly payouts allow you to either reinvest the interest or put it toward your financial goals earlier. For example, AU Small Finance Bank offers high-interest savings accounts and monthly payouts, allowing your money to grow more quickly and providing greater financial flexibility.
Final Thoughts
Maximizing returns from your savings account doesn’t have to be complex. By selecting savings account interest rate that are high, utilizing sweep-in facilities, maintaining a higher balance, and taking advantage of promotions, you can make sure your money is working as hard as you are.