With traditional bank savings accounts paying a modest amount of interest, more individuals ♓are looking for better-paying alternatives. Money market accounts, other bank-account options, and peer-to-peer lending are among them. Here's what you need to know about the best alternatives to bank savings accounts.

1. Higher-Yield Money Market Accounts

One simple alternative to depositing money in a traditional bank savings account is a 澳洲幸运5官方开奖结果体彩网:money market account. Money market accounts are insured by the Federal Deposit Insurance Corporation (FDIC), just like regular savings or 澳洲幸运5官方开奖结果体彩网:checking accounts.

In addition to paying higher interest rates than standard savings accounts, 澳洲幸运5官方开奖结果体彩网:money market accounts offer limited 澳洲幸运5官方开奖结果体彩网:checking account services. There i💫s usually a relatively low maximum number of checks that you can write on youಞr account per month—typically between five and 10.

In return for abiding by this restricted withdrawal activity, money market account holders receive a higher interest rate than traditional savings accounts. For example, a bank offering only a 0.10% interest rate on standard savings accounts might offer a 0.25% interest rate on a money market account.

Money market accounts usually have other restrictions, such as a required minimum opening deposit amount or minimum balance requirement. If the account balance drops below the minimum balance requirement, account holders may get downgraded to the lower standard interest rate offered on regular savings accounts. Some banks also charge a penalty fee.

2. Certificates of Deposit (CDs)

If you don't need access to your funds for at least a year or two, you can consider certificates of deposit (CDs). Generally, the longer the CDꦬ term, the higꦦher the interest rate.

One-year and two-year CDs typically offer higher interest rates than rates on traditional bank 澳洲幸运5官方开奖结果体彩网:savings accounts. However, a CD locks up your money for the term—typically a few months to a few years. If you withdraw the money before the CD's term ends, the bank or 澳洲幸运5官方开奖结果体彩网:credit union may charge a fee or penalty.

If you don't want to lock up your money into one CD because you might need the funds, you can split the money into multiple CDs. For example, a 澳洲幸运5官方开奖结果体彩网:CD ladder strategy allows you to spread your savings across 澳洲幸运5官方开奖结果体彩网:CDs of varying term lengths to provide more liquidity.

3. Credit Unions and Online Banks

You can often get a higher interest rate simply by moving a savings account from a traditional bank to a credit union or online bank. Credit unions operate much the same as banks, although they typically offer fewer financial services. Credit unions commonly offer significantly better interest rates on savings accounts than banks do because credit unions are not-for-profit organizations.

Credit union accounts are federally insured through the National Credit Union Share Ins🥃urance Fund 🧔(NCUSIF).

Typically, online banks, such as 澳洲幸运5官方开奖结果体彩网:Ally Bank or 澳洲幸运5官方开奖结果体彩网:American Express Bank, offer higher interest rates on savings accoun🤡ts. Since online banks have lower overhead expenses than banks with physicalꦬ branches, they can pass those savings on to their customers. Moreover, these banks typically offer more attractive CD rates than brick-and-mortar banks.

4. High-Yield Checking Accounts

澳洲幸运5官方开奖结果体彩网:High-yield checking accounts also tend to offer better interest rates than savings accounts. Some of these checking accounts offered more than a 6% a🔥nnual percen🍸tage yield as of 2025.

To get the higher interest rates, you typically have to meet certain requirements, such as having a minimum balance, establishing direct deposit or bill pay, or conducting a minimum number of monthly debit 𝔍card transactions.

If you fail to meet the requirements for receiving the higher rates, you will not pay a penalty but instead receive the bank's standard lower rate for checking accounts.

5. Peer-to-Peer (P2P) Lending Services

Peer-to-peer (P2P) lending services, usually operated through websites, have grown in popularity over the years. P2P lending provides a way to borrow money and can provide returns of 5% to 10% for individual lender investors who fund the loans. Through websites such as Prosper.com, individuals on the lending side provide loan capital for individuals on the borrowing side.

Lending accounts with even the 澳洲幸运5官方开奖结果体彩网:best P2P lenders are not FDIC-insured like bank savings accounts, and you could lose money. The service screens borrowers who must meet specific requirements to get loans.

However, the risk of any individual loan gets spread across several lender investors. Individual lenders usually fund no more than $25 to $50 of any one loan. For example, an individual seeking a loan of $2,000 for home improvements may have the loan funded by 40 different individual lenders, each providing $50 toward the loan total.

The lending service evaluates borrowers and the purpose of the loan to determine 澳洲幸运5官方开奖结果体彩网:credit risk and the interest rate for a loan. 𝓡Individual lender🐽 investors can select their risk tolerance to determine which loans their money will fund.

Keep in mind that the regulatory environment around P2P lending can get and differ from state to state. Before investing, do your due diligence and carefully examine how you will receive payments as a lender.

The Bottom Line

Alternatives to the traditional passbook savings account can allow you to earn higher interest rates on your money. Some options may not offer the liquidity of a savings account and may have requirements ranging from minimum balances and monthly limits on transactions to a lack of federal insurance. Consider consulting with a professional financial advisor for the best strategy for your money.