Guest Post: Forget the Traditional Savings Account. Save Your Money Here Instead.

If you’re trying to save money, chances are you have a savings account. They’ve been the go-to place to stash your money since the beginning of time.

But what if I told you there was a better way to build your savings?

It’s true!

Traditional savings accounts pay a meager 0.10% interest and, at that rate, you won’t earn more than $5 a year on a balance of $5,000.

But more lucrative options are available to grow your money and reach your financial goals faster. It’s time to ditch your traditional savings account and get more from your money by using these savings strategies instead.

If you want a hands-off approach that lets you keep your money in the bank, moving your cash to a high-yield savings account will deliver a better return. Your cash is FDIC-insured just like a traditional savings account, but the interest rates are much higher, meaning you’ll earn more money.

The best online banks let you cash in on rates as high as 2.50% or more, and a one-time transfer is all it takes to get started. Then, you leave your money alone and watch it grow.

After a year, you’ll notice your $5,000 can earn $125 in interest instead of the $5 you’d get with standard savings.

That’s a $120 increase in your rate of return without taking any risk at all. Sounds good, right?

To get in on a little more action, peer-to-peer (P2P) lending might be what you’re looking for. Instead of leaving your money to slouch around in a boring bank account, you are the bank.

Online platforms like Lending Club and Prosper are available to connect you with people who want to borrow money, and you’re in control of who you lend your money to.

Your earnings could pile up as you collect interest payments from the borrowers. Like most investments, the riskier the loan, the more interest you’ll earn.

If going out on a limb for a chance to get a 10% to 14% return on your money is worth the risk, you can. Playing it safe with a more stable borrower, though, can still earn you around 5%, and that’s a sizable return, too.

Before you skip this section, keep in mind that investing in real estate is possible even if you’re on a budget. Better yet, you won’t even need to become a landlord or spend precious time managing the properties.

To get started without all the fuss, consider Fundrise to help build passive income with real estate. Investors big and small have taken the time to leave a Fundrise review on sites like the Better Business Bureau, Google, and TrustPilot and the platform consistently receives praise.

Crowdfunded real estate is a fantastic alternative to a traditional savings account and has the potential for big kickbacks. The best part? You’re not stuck putting down 20% on a property or dealing with tenants. With Fundrise, all you need is $500 to begin your journey into real estate investing.

Bonds are another reason to kick your traditional savings account to the curb. While your money isn’t FDIC-insured like it is with a high-yield savings account, bonds are a low-risk investment.

Even if you have no previous experience, you’ve probably heard of corporate bonds and government bonds. While those are great options for your money, they serve big government and large companies.

What about the little guy?

That’s where Worthy’s bonds come in. Their focus is on lending money to the small businesses that help bring communities together. Plus, the return is fantastic since they offer a 5% fixed interest rate on the money you invest.

With your cash growing at 5% while it’s being put to good use, you’re sure to feel good about saving with Worthy.

Paying down debt might not sound like a solution for building up your savings account. But if you think about it, you’re wasting hard-earned cash every time you make a monthly debt payment.

Let’s say you've racked up some credit card debt with a 17% interest rate. By simply paying off this debt, the money that would have gone towards feeding money-hungry lenders would instead go in your pocket.

While it isn’t a true alternative to a traditional savings account, there’s no better way to save your money than by paying down debt. Can you imagine how fast you’d reach your savings goals if all that cash wasn’t going to fees and interest? There’s no better return than 17%!

If leaving your money in the bank is your goal, you might want to think about using a money market account instead of traditional savings.

People just like you are drawn to money market accounts because they can pay a more significant interest rate than standard bank accounts.

Many have returns of 2.0% or more without taking any risk since money market accounts are FDIC-insured.

Since your money market account could come with higher minimum balance requirements, it’s the perfect place to stash your emergency fund. Plus, being able to write a check or withdraw cash with your debit card makes money easy to access in emergencies.

Certificates of deposits (CDs) have been around forever and the high rate of return makes them a wonderful place to keep your cash. The only problem is the best rates require you to leave your money in one for a year or more.

And that means you might not have a way to get your money when you need it. But beating the banks at their own game is easy when you build a CD ladder and spread your money across multiple CDs that mature at different times.

If you open CDs with varying term lengths, you can withdraw your money as they mature. For example, you could mix up CD terms so that you have one maturing each month. This way, you’ll always have one coming open. You can always roll the funds into a new CD to keep your momentum going if you don’t need the cash.

Get a head start on your journey toward achieving financial independence by analyzing and tracking your income, expenses, investment performance, and overall net worth with the free online wealth management tool Personal Capital.

We use Personal Capital regularly to analyze our investment fees, track our investments, and project our net worth. We also periodically review our progress toward retirement with their retirement planning calculator.

If you’d rather do things on your own, become a subscriber today and you’ll receive our Free Financial Planning Dashboard. This tool allows you to enter your income and expenses to create a detailed budget. You can use it to track your spending habits over time or just to get an idea of where your money is going each month.  Take a look at the automatically generated charts and you may discover you have a little more cash to invest than you thought.

If you’re interested in detailed instructions on how to budget, save, pay off debt, and invest, check out The 6 Phases of Building Wealth. This book provides step-by-step instructions for working through each “Phase” in the process of achieving Financial Freedom. If you're just starting out, the information in this book will provide you with an invaluable resource. You can pick up the digital version for only $2.99 on Amazon.

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