In this article, the author shares how they were able to significantly increase the interest on their savings in just five minutes. By switching from a savings account with minimal interest to a high-yield savings account with a 2.0% interest rate, the author saw a substantial improvement in their savings. Additionally, they took advantage of high certificate of deposit (CD) rates and opened CDs with Ally, earning 92 times more interest than their old savings account. The author discusses their strategy for managing their CDs and emphasizes the benefits of laddering CDs and renewing them. They also highlight the importance of maintaining a high-yield savings account for emergencies and big-ticket purchases. Overall, the article provides valuable insights on maximizing savings and growing wealth in a professional tone.
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I’m earning 92 times more interest on my savings than I was a few years ago — and it only took 5 minutes.
Last year, the author made a significant financial decision by opening a high-yield savings account and moving their money from a savings account that was earning very little interest. The move to Ally’s high-yield savings account, which had a 2.0% interest rate at the time, resulted in a 40 times increase in their savings compared to their old savings account.
At the beginning of this year, the author took advantage of Ally’s high CD rates and opened CDs with different term lengths, ranging from six months to 13 months. The 13-month CD had a 4.6% APR, which is 92 times more than the interest they were earning from their old savings account. This decision allowed them to significantly increase their earnings on their savings.
I’m laddering my CDs
By choosing to invest in CDs instead of keeping their funds in a traditional savings account, the author is able to earn nearly 100 times more in interest. The process is simple and only requires opening a few CDs and selecting the maturity dates and amounts.
Ally currently offers high-yield CDs with term lengths ranging from three months to five years. The author chose a timeframe of six months to 13 months as it was a comfortable timeline for them to keep their funds locked in. By building a CD ladder, they have the flexibility to access funds if needed or move them into a different type of savings account every three months.
I’m planning on renewing my CDs
One of the advantages of choosing Ally’s CDs is that they automatically renew. About a month before the renewal date, the author receives an email reminder that their CD is set to mature. They can then check the current rates and decide whether to renew the CD for the same term, move it into a different term, or withdraw the funds.
In case the author misses the cutoff for making changes before the CD term ends, Ally provides a 10-day grace period starting from the CD’s maturity date. As the author doesn’t have any big-ticket items in the near future that their main savings account cannot cover, they have been renewing their CDs. The only potential change they might make is to choose a different CD term, as the rates tend to change. Ally also offers a 0.05% loyalty bonus for renewing CDs, which is the same interest rate the author was earning on their old savings account.
I’m still using my high-yield savings account
While the author has shifted a significant portion of their savings to high-yield CDs, they still maintain a cushion of funds in their Ally high-yield savings account. This account serves as a reserve for big-ticket purchases, vacations, and emergencies. Ally’s platform makes it easy to set up different savings buckets and recurring transfers, surprise savings, and boosts, enabling the author to save regularly.
By keeping their main reserve of cash in a separate high-yield savings account, the author avoids the risk of needing to tap into their funds early and incurring an early withdrawal penalty. Although their strategy might change in the future as they continue to explore different ways to grow their money, for now, they are satisfied with the combination of high-yield CDs and savings accounts.
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Conclusion
In just five minutes, the author was able to earn 92 times more interest on their savings by switching to a high-yield savings account and opening CDs with higher interest rates. By laddering their CDs and renewing them when the terms end, they have consistently grown their savings. Additionally, they still utilize a high-yield savings account for easy access to funds when needed. This simple and effective strategy has significantly increased their earnings.
Overall, the decision to optimize their savings by leveraging high-yield accounts and CDs has proven highly beneficial for the author. By taking advantage of competitive interest rates and remaining proactive in managing their investments, they have achieved substantial financial growth while maintaining accessibility to their funds.
