If you're an investor, you may use a savings or money market account to earn interest, or to purchase a portfolio of bonds. Consider these strategies to increase th🎐e amount of interest earnings in your portfolio. Following these tips ca🍰n increase your earnings and generate higher returns.

Compounding Interest

If you can reinvest interest payments earned on a bond, you can benefit from 澳洲幸运5官方开奖结果体彩网:compounding interest. This means that you earn interest on both your original investment and on prior interest pa💖yments. Over time, your total interest e🤡arned can be much higher if you can use compounding.

Assume, for example, that you own a $1,000 澳洲幸运5官方开奖结果体彩网:corporate bond that pays 5%, or $50, interest annually. If you reinvest the annual $50 payment in a similar 5% bond, you would earn an addi🔥tional $2.50 at the end of the next year. You can use compounding to rei🍒nvest the $52.50 total at 5% and accumulate even more interest.

If y♏ou can reinvest your earnings, this ♎strategy is an effective way to earn additional interest.

Laddering Bond Maturities

Bond 澳洲幸运5官方开奖结果体彩网:laddering allows you to reinvest the proceeds from bond maturities every few years. The bonds are laddered because they have different maturity dates. This strategy means that s🌠ome bonds in the portfolio mature every few years. The proceeds from each maturing bond are reinvested at current interest rates.

A portfolio that takes advantage of laddered maturities can reduce 澳洲幸运5官方开奖结果体彩网:interest rate risk on your investments. This refers to the risk that the value of an investment may change as interest rates change. In an environment of increasing interest rates, the value of your bond portfolio 🐭will decline.💎

Assume, for example, that you buy $100,000 in corporate bonds. Every four years, $20,000 reaches the 澳洲幸运5官方开奖结果体彩网:maturity date and cash is repaid to you. In the third year, assume that interest raꦚtes start to increase. When the first $20,000 matures in the fourth year, you can reinvest the proceeds at the new higher interest rates and earn more interest income.

Mutual Fund Breakpoints

If you invest in mutual funds, you may pay 澳洲幸运5官方开奖结果体彩网:sales charges for investing in each fund. If you buy a bond mutual fund, you can use a 澳洲幸运5官方开奖结果体彩网:breakpoint to increase your interest earnings. A breakpoint is a 澳洲幸运5官方开奖结果体彩网:quantity discount that you earn by purchasing a variety of ꦦmutual funds within the same fund family. If you make your purchases within the same family, you can earn a discount on any sales charges.

Online Savings Accounts

You may be able to increase the interest you earn by using an online 澳洲幸运5官方开奖结果体彩网:savings account. Some 澳洲幸运5官方开奖结果体彩网:financial institutions can offer higher rates because their cost structures are lower than traditional banks. The online 澳洲幸运5官方开奖结果体彩网:business model does not require physical bank locations. Because these institutions have lower 澳洲幸运5官方开奖结果体彩网:fixed costs, they can offer higher 澳洲幸运5官方开奖结果体彩网:savings rates and lower minimum required balances.

Other Banking Relationships

If you have a business relationship with a bank, it may be happy to negotiate a higher 澳洲幸运5官方开奖结果体彩网:interest rate on your personal 澳洲幸运5官方开奖结果体彩网:checking account or your personal savings account. Say, for example, that you've had a business loan at a bank for several years. Because you have an established history as a reliable customer, your banker will ❀want to maintain a good relationship with you. Use that relationship to get a higher interest rate on your bank balances.

If you have accounts at several different banks, a banker might offer a higher interest rate if your move all of the balances into his bank. This is a strategy for the banker to gather more assets and build a relationship with you. Take adva༒ntage of this offer, and combine your balances to earn a higher interest rate.