These days, we could all use some extra money. Whether you’re struggling to keep up with inflation, feeling the strain of an expensive holiday season, or both, you’re probably looking for ways to earn a little extra money.
Even better? Finding ways to generate passive income. This may be easier than you think.
If you have money in a savings account that isn’t earning much interest, moving it to a new location can earn you an extra $500. Find out what you can gain by parking your money in the right place.
What is a high-yield savings account?
Where you put your savings is important. The account type you select can mean the difference between earning a significant amount of interest or barely enough to notice.
A high-yield savings account is an excellent choice for your savings. This type of account typically offers a higher interest rate than the national average for traditional savings accounts.
This type of account typically compounds interest daily, allowing your balance to grow quickly. You may be limited to a certain number of penalty-free monthly withdrawals, but you will have complete access to your funds, as opposed to CDs, which require you to wait for the maturity date. Furthermore, most accounts are FDIC-insured, so you can be confident that your hard-earned money is safe.
How to Earn an Extra $500 per Year from Your Savings
It is time to put your money to work. Opening a high-yield savings account is one of the most simple ways to earn extra money.
The FDIC reports that the national average savings account rate is 0.46% as of December 22, 2023. Jenius Bank offers a high-yield savings account with a 5.10% APY, which is 11 times the national average for a typical savings account.
So, if you deposit $10,000, you will earn $523.19 in interest over the course of one year. This assumes you will make no additional contributions during the year, interest is compounded daily, and the interest rate remains constant.
Consider the following scenario: all of these factors remain constant, but you do not touch the account for two years. In this case, you will earn an additional $1,073.76 — for doing nothing.
In five years, assuming the same circumstances, you will earn $2,904.39. You’ll earn $6,652.32 over the next ten years, and $17,729.97 after twenty.
Compound interest clearly wields considerable power.
Start small and earn big.
It’s possible you don’t have $10,000 in savings, and that’s fine. Some high-yield savings accounts may require a minimum balance to open and earn interest.
However, Jenius Bank does not. As soon as you deposit any amount of money, you can begin earning the 5.10% APY on your funds.
Let’s say you only have $500 to deposit. Even if you do nothing for a year, you will earn $26.16 in interest. In two years, you will have an additional $53.69. This figure rises to $145.22 in five years and $332.62 in ten years.
Maybe you have a little more to invest, say $5,000. In this case, you will earn $261.60 in interest after a year. In two years, you’ll earn $536.88, increasing to $1,452.19 in five years and $3,326.16 in ten years.
Each penny counts. Even if you don’t earn $500 in interest per year, opening a high-yield savings account can be extremely beneficial. Instead of sitting around and essentially collecting dust, put your money to work earning as much interest as possible.
Watch out for fees.
Before opening a high-yield savings account, always read the fine print. You’re probably choosing to move your money to this type of account to increase your interest earnings, so you don’t want to end up paying unnecessary fees that can quickly add up.
Jenius Bank does not charge any fees, including monthly maintenance, account opening, or transaction fees. This means that the earnings you receive will be solely profit.
The last thing you want is to inadvertently transfer your funds to a high-yield savings account that charges you more in fees than interest. Regardless of how much money you have in savings, this type of account should increase your interest earnings.
As you can see, a high-yield savings account offers a lot of potential earnings. Whether you have $10,000 to deposit right now, allowing you to earn $523.19 in interest over the next year, or just a few hundred dollars, opening this type of account can always be beneficial.
There aren’t many ways to earn money for free, with no strings attached. Putting your money in a high-yield savings account is one of the few ways to accomplish this, so make the most of it.