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Put Your Savings in Hyperdrive: 6 Ways to Accelerate Your Interest

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Over the last week or so, I’ve written a little about small changes you can make to your savings habits to speed up your interest earnings. This is a task that is getting more difficult with the economy possible heading for a recession and with the Fed lowering interest rates. With lower yields even in the highest-paying online savings accounts, bank accounts need as much help as possible. Here’s a summary of the 6 ways I’ve determined to break the light barrier.

1. Open a High-Yield Account. Most banks are counting on your continued comfortability and settlement with interest rates as low as 0.25% APY. You can do much better than that. More »

2. Keep Your Change. Make a habit of dropping your loose change into a jar every day, and deposit the savings monthly. Try rounding all your purchases to the next dollar and transferring the sum of the remainders into the high-yield savings account. The little amounts add up over time and add to your principal. More »

3. Automate Your Savings. Set up direct deposit and automatic transfers so your money moves into savings and grows without your meddling interference and temptation. More »

4. The Expensive Coffee-Related Drink Factor. The Latte Factor® as described by author David Bach is not free of problems. Some of the problems can be conquered if you take the spirit of the concept. Reduce or eliminate a habitual, unnecessary expense and divert the funds to savings instead. More »

5. Hide Your Savings From Yourself. Try putting your savings in a different bank, with statements shipped elsewhere. Hide this account in your money management software so the balance isn’t included in your totals. Out of sight, out of mind. More »

6. Make Your Raise Invisible. Roll any increases in pay from your employer directly into your savings. A 3 percent raise signals a 3 percentage point increase to your savings. If you were saving 10% of your income, start saving 13%. More »

I am confident that in addition to these, there are many other ways to supercharge your savings. If you have any suggestions, feel free to share in the comments.

Published or updated January 23, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

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