When considering where to put your savings, one of the most important factors is how much interest the account will earn you. So which savings account will earn you the least money?
Traditional Savings Accounts Earn the Least
The savings account that will earn you the least money is the traditional savings account. Traditional savings accounts offer extremely low interest rates, usually around 0.05% APY currently.
With such low interest earnings, your money will not grow quickly in a traditional savings account. The paltry interest cannot keep pace with inflation, steadily eroding your purchasing power.
Online Savings Accounts Earn More
Savings accounts that earn you more interest include online high-yield savings accounts and money market accounts.
High-yield savings accounts earn over 40 times more interest than traditional accounts, with average APYs around 2.00% now. Money market accounts earn about 30 times more interest on average versus traditional savings.
CDs, Treasury securities, and money market mutual funds also earn significantly higher yields than traditional savings accounts.
Choosing the Best Savings Account
When deciding which savings account will earn you the least money versus the most money, consider these factors:
- Interest rates and APY
- Account fees and minimum balances
- Accessibility of funds
- Bank reputation and transparency
Avoid keeping the bulk of your savings in traditional accounts if you want to earn the most interest possible. Opt for an online high-yield savings account instead to maximize earnings.
