online savings accounts alternatives

Just a few short years ago, I was thrilled to start investing in online savings accounts. At the time, there were so many great offers of high interest rates. Simply by transferring my money from my brick-and-mortar account to an online one, I was able to greatly increase my interest revenue. However, since that time, rates have gone down. Therefore, I, like many other people, am not looking into online savings accounts alternatives.

Why Are You Looking For Online Savings Accounts Alternatives?

Before you can determine the plan that’s right for you, you have to know your end goal. When I switched from my regular savings account to a high yield online account, the goal was entirely to make more money off of my interest. I wanted to have all of the same benefits of a regular savings account, though. So, in my case, I’m looking for online savings accounts alternatives that allow me to continue to access my money fairly easily if I need it while still earning higher interest than I can at a traditional bank.

3 Online Savings Accounts Alternatives

Obviously, you can just go back to a regular savings account with your traditional bank. In fact, that’s what I’ve done for the time being. My money is still in savings. However, the interest is a pittance. So, here are three online savings accounts alternatives that I’m considering:

1. No-Penalty CDs

There are a lot of different options when it comes to getting a Certificate of Deposit (CD). One that you might not be as aware of is the no-penalty CD. As the name suggests, you’re allowed to access your money without fees for penalties. In other words, it’s basically just a savings account with a higher interest rate. Ideally, you’ll find a high-interest no-penalty CD. Then you’ll use it like a savings account. Don’t withdraw the money unless it’s an emergency, but know that you can if you need to.

2. CD Laddering

Here’s another of the most popular online savings accounts alternatives. CD laddering is the practice of purchasing a variety of different CDs that will mature at different times. Like rungs on a ladder, the money from one becomes available then later the money from the next, etc. When a CD matures, you can take the money out or re-invest it into the next rung of the ladder to keep growing your savings. While not as flexible about being able to remove your money at any time as a typical online savings account would be, this does provide a good option for saving money at a higher interest rate.

3. US Treasury Notes

You can invest in US Treasury Notes. Each one has varying dates of maturity. For example, you can purchase one that will mature in two years and another that will mature in five years. Obviously, the longer you’re willing to wait for maturity, the higher the rate of return. However, you do start to get interest payments within a short period of time (usually six month.) Therefore, this can be a terrific way to earn slightly higher interest than with an online bank without having to commit to a long-term investment that ties your money up for decades.

What do you think? What’s the best way to save money at a higher interest rate and yet still have it readily accessible if you need it?

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