4 ways to earn more than a traditional savings account

If you're not saving money in a high-earning account today, you could be missing out on the benefits of today's high interest rate environment. 

The national average savings rate — which includes traditional savings accounts from large, national banks — is just 0.42%. But you can earn more than 10 times that today, while still keeping your money safe and accessible within an account that adds interest to the money you deposit. 

The specific account you choose may depend on details such as your timeline, deposit, how much interest you want and how frequently you need access to your savings, but the four options below can all make be options good for savers looking to maximize interest today. Plus, you may even choose to combine them for maximum earnings toward different savings goals.

Find out how much you can earn now with today's top savings rates. 

4 ways to earn more than a traditional savings account

You can use these four different savings vehicles to start earning more on your balance today.

High-yield savings account

A high-yield savings account offers the flexibility of a traditional savings account with the added bonus of a competitive interest rate. Today, an account from an online bank can help you earn between 4% and 5% APY.

These accounts allow you to make contributions toward your savings balance and transfer funds in and out whenever you want. That makes them ideal for your emergency savings, which you may need to access quickly, but also for any short-term savings goals.

Compare top high-yield savings accounts from online banks today to start boosting your savings balance!

Money market account

Money market accounts are similar to high-yield savings accounts — and competitive high-yield money market options can offer similar 4% to 5% APYs — but there are some important differences, too.

For one, these accounts tend to come with higher minimum balance requirements. While some high-yield savings accounts require minimum deposits to earn the best rates, these restrictions may be more common among money market accounts. Money market accounts also typically come with the added benefit of debit card or check-writing access. While this is less common among savings accounts, it could be useful if you need to access your emergency fund at a moment's notice.

Certificate of deposit (CD)

Certificates of deposit (CDs) are another common way to save. There are different types of CDs that offer different terms and varying levels of access. But a regular high-yield CD generally requires you to lock in a deposit upon opening, which will earn interest at a fixed rate over a fixed term. When the CD matures, you can withdraw your original deposit and interest without penalty.

CDs are among the top-earning ways to save today, with some short-term CDs earning upwards of 5.25% APY. Long-term CDs, too, can be useful for locking in today's high rates for up to 10 years. But it's important to choose your CD carefully. If you need to withdraw early, you could risk a penalty fee worth a portion (or all) of your interest earned).

Compare today's top CD rates here now!

Money market fund

Money market funds are different from the above options because you typically open them through a brokerage account instead of a bank. These are mutual funds invested in low-risk investments and may offer slightly higher returns than high-yield deposit accounts.

"Most competitive money markets are paying close to 5%, if not more in some cases," says Shawn Ballinger, CFP, founder of Columbus Street Financial Planning.

Another important thing to keep in mind is that money market funds — unlike savings accounts, money market accounts or CDs — are not FDIC-insured. While the investments within the fund are low-risk compared to stocks, you forfeit the security of federal insurance. They can still be lucrative for shorter-term investments, but it's important to make sure you know all the details before opening.

"These funds are generally designed to not go down in value, and have yields that can be even higher than high-yield savings accounts," says Adam Van Wie, CFP and chief operating officer of Van Wie Financial. "The only downside is that you have to sell the mutual fund to access the cash, so that money can take a day to clear and be ready to transfer to spend."

The bottom line

There are a number of account types savers can use to start benefitting from high interest rates today. Whether you're looking for a place to put your emergency fund, savings you want to use for a specific goal a few years away or short-term, low-risk investments — there is an account for you. Just make sure you understand the full details of any account you're considering — and how it can help you reach your financial goals — before you decide. 

Compare top CD rates here today to get started!