by | Feb 24, 2023 | Personal Finance | 0 comments

If you are saving for a rainy day (or a sunny one, for that matter), good for you!  You can boost your savings power by being aware of a few simple tips:

#1 – Shop savings rates – especially now! 

A few years ago, one savings account didn’t earn much more than another, so you didn’t make much interest no matter where you stashed your cash. Now the environment is quite different.

With the Fed increasing interest rates regularly, it’s a good idea to check out whether your savings account is keeping up.  Do you get regular “raises” in your rate?  (You should.)  Does your financial institution do this automatically?  (They should.)

If you are still making next to nothing in your savings account, and/or if you have to nag your bank to give you a higher rate, it may be time for an upgrade.

A good place to start is by checking out your current savings rate.  This could be obvious or it could be tricky, depending on your bank.  Look at your statement for APY (Annual Percentage Yield).  This is the amount of interest you earn.  When you find it, compare it to national and local average rates. 

One place to find out this information is at  When I checked national averages for savings accounts on Feb. 22nd, I noticed that savings rates vary from 0.1% (sad) to over 4.0% (awesome).  If you’re on the low end, consider shopping for a better rate.  If you need a little motivation, consider this:

If you have $10,000 in your savings account and it is earning 0.1%, you’re earning a whopping $10.00 per year for letting it sit at that bank in that account.

If you move that $10,000 to a savings account earning 4.0%, you will instead be making $400.00 per year, while still just letting your money sit and grow.  You’ve given yourself a $390.00 raise by doing a little research and taking action.  Not bad!

*Pro Tip: watch out for “introductory rates” that may sound great but only last for a short amount of time.  Also be on the lookout for fees (although most savings accounts don’t have them these days) and minimums (make sure it’s either $0 or a level you are comfortable with).

#2 – Be FDIC aware.

Money deposited in a savings account at an FDIC bank is insured by the Federal Deposit Insurance Corporation.  If the bank fails, your money is protected, up to a certain limit.  Per the FDIC website:

FDIC insurance covers depositors’ accounts at each insured bank, dollar-for-dollar, including principal and any accrued interest through the date of the insured bank’s closing, up to the insurance limit.

While it’s unlikely this will happen, I believe it’s important to be aware of the limit for FDIC insurance.  The standard insurance amount is $250,000 per depositor, per insured bank, per ownership category.

That means if you have over $250,000 in one savings account at one bank, you may want to consider spreading out your savings over different banks or different accounts so that all of your money falls under FDIC protection. 

#3 – Think about your preferences and how you access your money.

After being aware of savings rates and FDIC insurance, where you park your savings is largely a matter of personal preference. 

Some people prefer brick-and-mortar banks, where you can walk in and have a conversation with a teller.  Other people prefer online banking, where you can manage transactions any time of day or night. 

Some people prefer large national banks, which tend to have more advanced technology and mobile apps.  Other people prefer smaller local credit unions, which tend to have better rates and customer service.  There’s not really a wrong answer here; you simply need to think about your needs and what’s most important to you in your banking habits. 

*One other caveat about savings accounts and accessing your cash: keep in mind the money in a savings account is meant to sit there for at least a little while.  So, unlike checking accounts, savings accounts often have a limit on the number of withdrawals and transfers you can make each month.  Make sure you’re not moving money in and out of savings too frequently or you could get hit with unpleasant fees. 

There are other savings vehicles, of course, but savings accounts are the basis for your savings journey, no matter where you are on that journey.  Being smart with savings accounts helps to build a solid foundation for future good decisions.