Where to Put Your Money When Interest Rates Are Low

Written By Mary Beth Eastman
Last updated January 29, 2021

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June 28, 2018

Simple. Thrifty. Living.

Saving money is a great plan, but are you getting the most out of it when consumer saving accounts are only paying 1 percent interest? Here are a few ways that you can grow your funds when checking and savings accounts don’t yield the results you want.

Unlike other retirement accounts, Roth IRAs use post-tax income. While that characteristic may seem like a major disadvantage, it can work to your short-term advantage. Since the money put into this account has already been taxed, it offers more liquidity than a 401(k) with a large withdrawal penalty. You also have flexible options for how that money gets invested. For example, it can go into real estate, stocks or mutual funds. The best online IRAs let you have full control over your account.

If you don’t need immediate access to your money, a CD is a low-risk way to grow your savings. The bank holds the funds for a specific time frame, from months to years, and offers higher interest rates than a savings account. If you choose to withdraw before the maturity date, you get hit with a high penalty.

Take advantage of the low interest rates by investing in real estate during this prime opportunity. You must be willing to have your money tied up in the property purchase over the long term if you want to take this approach. Working with an investment property also requires a lot of hands-on management compared to the other options in this article.

Are you interested in the stock market, but you’re not sure where to start? Money market funds can be a good choice. They fall under the mutual fund category and are low risk. You won’t get as much of a return as you would from riskier investments, but you also don’t have to worry about suddenly losing all your savings unexpectedly.

Savings accounts are a useful tool to have in your financial repertoire, but these savings options give you ways to see a better return. Experiment with one or more to see whether it fits your savings goals and risk profile.

About the Author

Mary Beth Eastman

Mary Beth Eastman serves as the content manager for Simple. Thrifty. Living, where she is dedicated to helping readers use money and credit wisely. Mary Beth believes that access to the right financial information paired with a growth mindset are essential tools for getting out of debt and building wealth. Mary Beth has a degree in Journalism from Bowling Green State University and has focused her 20-year journalism career on putting readers front and center, carefully considering their concerns and presenting information that will help them in their everyday lives. She has won numerous statewide journalism awards. Her writing on personal finance as been featured on numerous websites in addition to Simple. Thrifty. Living, including Huffington Post and Lexington Law blog. Mary Beth resides in Pittsburgh, Pa., with her family and two rescue dogs.

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