Do you want to learn how to get more interest in a savings account? If so, you've clicked the correct link! Yes, Banks usually pay a small amount of interest on savings accounts. However, you may also earn higher returns. It’s time to make your savings account work harder for you! This blog article goes over several strategies for increasing the interest rate on your savings account. Whether you are just getting started or a seasoned saver, it has some terrific suggestions to help you meet your savings goals in no time. So, let's get started!
How Do You Calculate Interest on a Savings Bank Account?
Before going through tips to get a higher savings account interest rate, you must understand how this interest is calculated. Here's a simple formula to assist you:
Monthly Interest = Daily Account Amount * Number of Days * Annual Interest Rate/Total Number of Days in a Year
Simply multiply your daily amount by the number of days in the month, then multiply by the yearly interest rate. Finally, divide the total number of days in a year. It may appear complex at first, but once you get the feel of it, it's actually relatively simple.
8 Proven Ways to Earn a Higher Savings Account Interest Rate
It's time to take action and increase your savings account interest rate. Here are 8 effective ways to do it:
1. Analyse Bank Offers
If you are looking to earn more money through your savings account, choosing the right bank is key. While most banks have similar interest rates for savings accounts, some offer special incentives that may be worth checking out. To find a savings account with a higher interest rate, you can easily compare basic interest rates from different banks online before opening an account. It's a simple and smart way to make the most of your savings.
2. Sustain a High Average Monthly Balance
It's essential to keep a certain average monthly amount in your savings account. But here's the good news - if you can maintain a high average balance, you can earn a higher interest rate. This is because banks usually offer an incremental rate of interest. Compounding works best when you have a high average balance. So, if you can save up more, you can see your savings grow faster through the power of compounding.
3. Select the Sweep-in Option
Sweep-In facility is a pretty cool automated feature that banks offer. Here's how it works: any money you have in your account above a specific limit gets converted into a Fixed Deposit (FD). This means that your funds earn interest at a higher rate than they would in a regular savings account. If you need access to those funds, the bank will automatically liquidate the FD for you. The best part? You don't have to do anything! The sweep facility is set up based on your standing instructions with the bank.
4. Look Into Age-based Savings Account
There are various types of savings accounts available for teens, kids, and older folks. One type that seniors should definitely check out is the savings account for senior citizens. These accounts typically offer a higher interest rate than a regular savings account, and many reputable banks offer it. If you are a senior, it's definitely worth considering to boost the interest on your savings. And suppose you are not a senior yourself. In that case, you might want to think about investing in the savings account of your parents or other older family members.
5. Create Additional Accounts
It's essential to be wise with your finances. If you rely on only one account for everything, you run the risk of using up all your funds that could have earned you some interest. But don't worry, there's a solution! One of the most proven ways to earn a higher savings account interest rate is to open up multiple savings accounts and assign specific financial goals to each one. You can keep track of your money easily with the help of their respective banking apps.
6. Look for Earnings Obtained Indirectly Via Standard Interest Credits
Did you know that when you have saved up enough money in your savings account, you can actually use the monthly interest credit to invest further? One way to do this is through SIPs, which allow you to have your interest income deposited every month. And if you invest your interest income in actively managed fund schemes, it can generate an even greater return. That's because these schemes are managed by specialists who work hard to make the most of your investment.
7. Invest in Certificates of Deposit
Have you considered investing in CDs (Certificates of Deposit)? They are like FDs. You can use your savings account to get started. Any designated financial institution or commercial bank in the nation can issue CDs with maturities ranging from three months to a year. Plus, in case of an emergency, you can reinvest a matured CD to earn a greater interest rate. It's definitely worth considering as an investment option to get a higher savings account interest rate.
8. Open Digital Savings Account
Many banks, digital banks, or financial institutes offer digital savings accounts that you can quickly start using via their digital banking app or net banking platform. Freo Save digital savings account takes this facility up a notch! It provides you with high interest rates and zero minimum balance requirements when you create a savings account through our digital banking platform. Plus, you can access your account statements and other banking services through our app or website anytime.
Say Hello to Smarter Savings with Freo Save
There you have it – 8 solid and practical tips on how to get more interest in a savings account! Gone are the days when a savings account meant sacrificing interest for the sake of financial security. With a little bit of knowledge and research, you can now get the best interest rates out there. And don’t forget to leverage digital banking when opening your savings account. It is the future of the financial sector! Happy savings!
