This simple trick can increase your retirement income
Adding a few hundred dollars to your retirement savings every month can make a big difference in your budget. It can allow you to take an extra vacation, sign up for a new membership or enjoy several extra meals.
And you can do this without much effort if you have a large amount of money sitting in a traditional savings account – which usually offers as low as 0.01% interest – or a checking account, which usually does not pay interest at all. Move that cash to a burning savings account to earn even more interest.
Perk for opening a new savings account
As people approach retirement age, they tend to move their money towards their riskier assets. But if that money then sits in a traditional savings or checking account, it doesn’t earn much interest.
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Some people stick with the same bank for years without comparing options or seeing if they can get a higher rate elsewhere. But online banks have gained traction over the past decade, with some of them offering annual interest rates as high as 4% or more. There’s a lot more to it than you’ll find in checking accounts and multiple savings accounts, especially if you’re doing business with a traditional bank.
Money market accounts are another type of bank account that offer high yields, but sometimes come with a limited balance requirement that you must meet to gain maximum leverage and avoid monthly maintenance fees. Always check the rules of a high-income savings account or money market account before opening one.
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Moving Your Money
If your current bank already has a high-interest savings account, it’s easy to transfer money. All you have to do is create a checking account and transfer the money from your checking or savings account to your new savings account. There, your money will compound quickly and generate risk-free returns.
It takes a little effort to move money from one bank to another, but the general idea is the same. You open an account at a new bank, and start online transfers between the two accounts.
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Extra money from hysa
A retiree with $100,000 sitting in a traditional savings account earning 0.01% apy will earn $10 in interest per year. But another consumer who had $100,000 in a high-income savings account earning 4% apy would get $4,000 a year, or $333 a month.
