How to maximize your savings

Saving money gives you a financial safety net and helps you secure your future. Use these six tips to maximize your savings rate, so you have even more money to put toward your dreams and goals each month.

1. Create a budget

You won’t know how much you can save until you track your income and expenses. There are several budgeting apps that will do this for you. But if you’d rather do it the old fashioned way, here’s how:

1. Add up all your income.
2. Add up all of your outgoing expenses each month, including mandatory expenses, discretionary spending and debt payments.
3. Subtract these expenses from your income.

If you have money left over, congratulations! You have funds to save each month. If you’re in the red, this means you’re overspending and need to either increase your income or cut down on expenses until you have some wiggle room to work with.

2. Work out a savings plan

Now that you have a clear idea of your income and expenses, you can create a plan for how much you want to save each month. Take some time to think about your savings goals. Do you have any particular purchases in mind, or do you simply want to build your balance as much as possible? An effective savings plan outlines:

• How much money you need to accomplish your goal
• The timeframe in which you’ll make it happen
• How much money you’ll save each month to get there

For example, if your goal is to build up a $1,000 emergency fund in four months, then you’ll need to save $200 a month to reach it.

3. Pay off debt

If you have debt, it may be eating up a huge chunk of your income — which means you have less to save each month. Prioritize paying off any unsecured debt, such as credit cards, student loans, medical bills and personal loans. These types of debt usually have high interest rates that make it difficult to get ahead and save.

Most people use the debt avalanche or snowball method to pay off debt. We recommend choosing a strategy that works best for you.

4. Automate your savings

The best way to maximize your savings is to set aside money on a regular basis. There are several different ways to automate your savings, including setting up recurring transfers or using money savings apps. When you automate your savings, the money is out of sight, out of mind, so you’re not tempted to spend it on other things.

You can also have windfalls, such as a tax refund or a bonus from your employer, automatically sent to savings. The more money in your account, the more interest you’ll earn.

5. Be disciplined

An important part of any savings plan is working out where you can cut back on expenses. From gym memberships to eating out, there are plenty of ways you can reduce your spending and have more money left over to put toward your savings.

One of the biggest barriers to saving is the temptation to dip into your balance at any given time. If you’re the type of person who always dips into your savings, you may want to consider taking steps to make it harder to do so. For example, you could open a savings account with a different bank, so it takes longer to access your money.

6. Choose a savings account

If you want your money to work harder for you, it’s essential that you choose the best account for the job. There are several different accounts you could open:

• Savings accounts. The best savings accounts have a high interest rate, a low opening deposit and minimal or zero fees. Most people use them for emergency funds, vacation funds and short-term saving goals.
• Money market accounts. These accounts marry all the best features of a checking and savings account. You earn a high interest rate, but you also get a debit card and checks. The only downside is, money market accounts typically require higher opening deposits and you usually can’t make more than six withdrawals a month.
• CDs. Certificates of deposit lock your money away for a set amount of time. When the term is up, you can withdraw your money or roll it over into a new CD. They tend to have higher APYs than savings accounts. But if you withdraw your money before the term is up, you’ll face a penalty fee.

If you have multiple savings goals, you may even want to consider opening a couple of accounts. For example, you can open a savings or money market account for upcoming vacations and a CD for a down payment on a car you plan to buy next year.

Compare savings accounts

Use the table to compare your savings options. If more than one account catches your eye, click the “Compare” box to view them side-by-side.

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Name	Product	Interest rates (APY)	Fee	Minimum deposit to open	Interest earned
American Express® High Yield Savings Finder Rating: 4.6 / 5: ★★★★★		0.50%	$0	$0		Enjoy no monthly fees and a competitive APY with this online-only savings account. Accounts offered by American Express National Bank, Member FDIC.	Go to site More Info	Compare	loading Fetching your data...
Aspiration Spend & Save Account Finder Rating: 3.8 / 5: ★★★★★		1.00% on $0 to $10,000 but you’ll need to be enrolled in Aspiration Plus and make at least $1,000 in debit card purchases a month	$0 per month or $15 per month for Aspiration Plus ($12.50 per month if you pay annually)	$10		Deposits are fossil fuel-free and insured by the FDIC. Enjoy a spend and save combo account with unlimited cash back rewards and a $100 bonus when you spend $1,000 in your first 60 days.	Go to site More Info	Compare	loading Fetching your data...
Axos Bank High Yield Savings Finder Rating: 4 / 5: ★★★★★		0.61%	$0	$250		No monthly maintenance fees. No minimum balance requirements. Interest compounded daily.	Go to site More Info	Compare	loading Fetching your data...
CIT Bank Money Market Finder Rating: 3.9 / 5: ★★★★★		0.45%	$0	$100		A savings account with a higher-than-average rate and minimal fees.	Go to site More Info	Compare	loading Fetching your data...
CIT Savings Connect Finder Rating: 4 / 5: ★★★★★		0.50% on + If you deposit $200+ monthly into your eChecking account, otherwise 0.42%	$0	$100		CIT Savings Connect combines aspects of a checking and savings account in one product.	Go to site More Info	Compare	loading Fetching your data...
SoFi Money Finder Rating: 4.3 / 5: ★★★★★		0.25%	$0	$0		SoFi Money® is a cash management account that charges no account fees to save, spend, and earn cash back rewards when you spend on brands you love.	Go to site More Info	Compare	loading Fetching your data...
CIT Bank Savings Builder High Yield Savings Account Finder Rating: 4.3 / 5: ★★★★★		0.40% on $25,000+ or set up a direct deposit of $100+ each month 0.28% on $0 to $24,999	$0	$100		No account opening or maintenance fees. Daily compounding interest. Earn one of the nation's top rates	Go to site More Info	Compare	loading Fetching your data...
Discover Online Savings Account Finder Rating: 4.6 / 5: ★★★★★		0.40%	$0	$0		Take advantage of a high-interest online savings account with no fees, no minimums and more.	Go to site More Info	Compare	loading Fetching your data...
UFB Direct High Yield Savings Finder Rating: 3.3 / 5: ★★★★★		0.20%	$0	$100		Earn an APY when your balance is higher than $10,000 with this no-monthly-fee savings account.	Go to site More Info	Compare	loading Fetching your data...
Betterment Everyday Cash Reserve Finder Rating: 4.6 / 5: ★★★★★		0.40%	$0	$10		This savings account has no account and overdraft fees, plus it requires no minimum balance.	Go to site More Info	Compare	loading Fetching your data...
Synchrony High Yield Savings Finder Rating: 4.9 / 5: ★★★★★		0.55%	$0	$0		Earn one of the highest interest rates without the fees.	Go to site More Info	Compare	loading Fetching your data...
UFB Direct Premium Money Market Account Finder Rating: 3.1 / 5: ★★★★★		0.20% on $25,000+ 0.10% on $0 to $24,999.99	$10 per month (can be waived)	$5,000		Enjoy the security and earning potential of a savings account while maintaining the flexibility to write checks.	Go to site More Info	Compare	loading Fetching your data...
Radius Bank High-Yield Savings Finder Rating: 3.9 / 5: ★★★★★		0.25% on $25,000+ 0.15% on $2,500 to $24,999.99 0.05% on $10 to $2,499.99	$0	$100		A free high-interest savings account with a $100 minimum deposit to open	Go to site More Info	Compare	loading Fetching your data...
Ponce Bank High Yield Savings Finder Rating: 4 / 5: ★★★★★		0.50%	$0	$1		Ponce Bank Savings account, offered through SaveBetter, has a $1 opening deposit and earns 0.50% APY.	Go to site More Info	Compare	loading Fetching your data...

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Bottom line

Maximizing your savings rate takes time and dedication, but it leads to financial security if you stick with it. Follow these tips to boost your savings rate and accomplish your goals.

If you’re hoping to fund your goals using a savings account, compare your options to find one that’s the right fit for you.

Frequently asked questions

• How much do I need to set aside each month to hit my savings goal?

  It depends on your goal, your interest rate and how often your savings account compounds interest. Use our savings account calculator to find out how much your savings will grow over time — and how long it’ll take to hit your goal.

• Should I switch accounts just to get an introductory offer?

  It depends. If it’s a competitive bonus, it might be worth it. But if the savings account isn’t up to your standards, you may need to switch accounts again when the offer is up. Read our guide to rate hopping for the best savings accounts bonuses to learn more.

• Is my money safe in a savings account?

  If you use an FDIC-insured bank, your deposit of up to $250,000 is backed by the US government. If you’re tucking away more than that, you may want to consider using multiple banks or savings methods to keep your money safe. Talk with an accountant to learn more.