No one wants to see their hard-earned cash sitting in the bank and earning a minuscule amount of interest. Instead, most people want their money to work hard and grow at a healthy rate over time.
Achieving that may be as simple as switching banks or even just swapping account types. Or trying a couple of other smart financial moves that can help you build your wealth.
Read on to learn smart strategies that may help you earn more interest than you are currently.
Key Points
- High-yield savings accounts and rewards checking accounts may both offer higher interest rates than their traditional counterparts, though may come with restrictions.
- Money market accounts often provide higher interest rates than standard savings accounts but may have minimum balance requirements and limited check-writing privileges.
- Certificates of deposit (CDs) can offer competitive interest rates in exchange for leaving your money in the account for a set term.
- Credit unions may provide higher interest rates and lower fees if applicants are eligible.
- A bond issuer, such as a government or corporation, may provide regular interest payments over the life of the bond in exchange for lending them money.
What Is Interest?
Interest is the percentage paid when money is borrowed or loaned out. Here are a couple of examples.
- When you deposit your money into an account at a financial institution, the bank may pay you interest. This is your reward for keeping your cash there, where they can lend some of it out or otherwise use it as part of their operations.
- When you borrow money (like a mortgage or car loan) or open a line of credit (say, for a credit card), you pay interest to your lender. You are paying for the privilege of using their money.
💡 Quick Tip: Banish bank fees. Open a new bank account with SoFi and you’ll pay no overdraft, minimum balance, or any monthly fees.
How Do You Earn Interest?
When you deposit money into a bank account, you are, in effect, loaning them the money. They pay you interest in return.
The financial institution can use that money in any number of ways, including lending it out to others. Say you deposit $10,000 in a savings account that earns a 3.00% interest rate. The bank could then use some of your money and that of other depositors to make a $100,000 mortgage loan at 7.00% to a borrower.
The difference between the 7.00% they are charging the person with the home loan and the 3.00% they are paying you and other savings account holders is one of the ways banks make money. And it’s also a good example of how and why you earn interest on your deposit.
How Does Interest Work?
Interest can work in a couple of different ways.
- With simple interest, interest is earned only on the principal, or the amount of money you deposited.
- With compound interest, interest is generated on the principal and the interest as it accrues. This makes your money grow more quickly. Interest can be compounded at different intervals, such as quarterly, monthly, or daily.
Here’s an example of what a $10,000 savings account would look like at the end of a year if you earned 3.00% simple interest:
$10,000 principal + $300 interest = $10,300 at the end of the year.
However, if that interest was compounded daily, by the end of the year, you would have:
$10,000 principal + $304.53 interest = $10,304.53 at the end of the year.
While it doesn’t sound like much, over time, the difference is amplified. If you’re wondering how to make money with interest, consider what those numbers would look like after 10 years:
Simple interest: $13,000
Compound interest: $13,498.42
It can be wise to check with financial institutions and see how often interest is compounded. The more frequent the compounding, the more your money will grow.
Recommended: Compound Interest Calculator
7 Ways to Gain Interest on Your Money
Now that you understand what interest is, consider these seven ways you might help your money grow faster thanks to the power of interest.
1. High-Interest Savings Accounts
Want to earn more interest on savings? Some banks offer high-interest or high-yield savings accounts that can pay higher rates than traditional savings accounts, while still providing fairly easy access to your money.
How big a difference can this make? When comparing annual percentage yield (APY), regular savings accounts are paying an average of 0.42% APY as of December 16, 2024 while high-yield accounts are offering about 3.00% APY.[1] When looking for a good interest rate for a savings account, most people would rather snag the latter.
Some high-interest accounts may limit you to six withdrawals or transfers per month, which was previously required by the Federal Reserve. While this Regulation D rule has been suspended since the coronavirus pandemic, some banks will still charge fees or have other penalties for more than six withdrawals, so be sure to check.
You can often find high-interest savings accounts at online-only banks. Because these institutions tend to have lower operating costs than brick-and-mortar banks, they often offer higher rates than traditional banks. They may also be less likely to charge monthly fees.
A high-yield savings account can be a great place to build an emergency fund or save for a vacation or home repair while providing safety and liquidity.
Increase your savings
with a limited-time APY boost.*
2. Rewards Checking Accounts
Checking accounts are traditionally used for storing money that you use frequently, and they typically don’t pay much, if any, interest. However, some banks offer rewards checking accounts. These may pay higher interest rates than traditional checking and savings accounts. For instance, while some standard checking accounts may pay little or no interest, rewards accounts may offer an APY of around 0.50%, or 1.00%, or more.
However, there may be some restrictions. For instance, the balance that earns the elevated rate may be limited. In addition, you may have to meet certain direct deposit or debit card transaction requirements each month to earn the higher rate.
Like other checking accounts, rewards checking accounts are highly liquid and typically come with check-writing privileges, ATM access, and debit cards. Plus, deposits can be withdrawn at any time.
If you’re considering a rewards checking account, however, you may want to first make sure you can meet any requirements.
3. Credit Unions
Another of the best ways to earn interest on your money is to consider joining a credit union.
Unlike banks, credit unions are owned by the people (or members) who hold accounts at the credit union. Because of this, these financial institutions work for the benefit of account holders instead of shareholders.
In some cases, that can translate into lower fees, better account perks, and higher interest rates. To join a credit union, you typically need to live or work in a certain geographic area or work for a certain employer.
If you have a credit union near you, you may want to check the rates it offers and see if you can get a good deal.
4. Money Market Accounts
A money market account is a type of deposit account that usually combines the features of both checking and savings accounts. This kind of account often requires a higher minimum balance to open than a standard savings account and typically earns a higher interest rate.
Some money market accounts also come with a debit card or checks (which you generally won’t find with savings accounts), but financial institutions may require that they not be used more than six times per month. Some will charge a fee if you go over that number.
It can also be a good idea to ask about other fees, such as monthly account fees and penalties, before opening one of these accounts.
Recommended: Guide to Deposit Interest Rates
5. Certificates of Deposit
Certificates of deposit (CDs), which are a kind of time deposit, typically offer higher interest rates than traditional savings accounts in exchange for reduced withdrawal flexibility.
When you put money in a CD, you agree to leave the money in the account for a set period of time, known as the term. If you withdraw your deposit before the term expires, you’ll usually have to pay an early withdrawal penalty.
One benefit of CDs is that you typically lock in a set interest rate when you open the CD. Even if market rates drop, you’ll keep earning the same rate. On the other hand, if rates rise, you’ll be stuck earning the lower rate until the CD matures.
One way to work around this is to open several CDs that mature at different times, a technique known as CD laddering. Having a mix of short- and long-term CDs allows you to take advantage of higher interest rates, if they bump up, but still have the flexibility to take advantage of higher rates in the future.
A CD ladder also helps with the lack of liquidity that comes with CDs. Because of the staggered terms of the certificates, one is likely to be coming due (or available) if you need to use the cash.
6. Bank Bonuses
Many banks offer special bonuses from time to time; these can be a way to boost the earnings on your money. You may want to keep your eyes open for high-yield savings accounts that offer a sign-up bonus or an interest rate bonus. These incentives can boost your earnings, though you may have to maintain a high minimum balance in the account to earn the higher rate.
You may want to keep your eyes open for high-yield savings accounts that offer a sign-up bonus.
Some banks also offer cash bonuses to customers who open new checking accounts. While this may also come with some requirements, such as setting up direct deposit and/or keeping your account open for a certain number of months to earn the bonus, it can be another good way to increase the income you earn on your bank deposits.
7. Bonds or Bond Funds
Another way to gain interest on your money could be with bonds, which are loans that the government or companies issue. These pay investors interest on a regular basis until the bond hits its maturity date.
These investments, however, are not insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA) the way an account is at a bank or credit union. U.S. savings bonds are backed by the government, but bonds may carry risk.
| Type of Account | Pros | Cons |
|---|---|---|
| High-Interest Savings | Higher interest | May have withdrawal limits |
| Rewards Checking | Higher interest, unlimited withdrawals, checks, and a debit card | May have requirements such as a certain number of debit card or ATM transactions |
| Credit Union | Higher interest | May need to live in a certain area or work in a certain profession to open an account |
| Money Market | Higher interest; checking account privileges such as a debit card and checks | May charge fees and/or limit number of transactions |
| Certificates of Deposit | Higher interest, guaranteed interest rate | Money must be kept on deposit for a specific time period or else penalties can be assessed |
| Bank Bonuses | Higher interest and/or cash to add to your account | Not offered by all banks; may have minimum deposit requirements or rate may decrease after introductory period |
| Bonds | Pay interest to grow your investment | May not be insured |
Other Ways to Make Your Money Work For You
If you’re planning to park your cash for at least five years or so and you are willing to take some risk, you may want to consider investing your money in the market.
While an investment may have the potential to generate a higher return, all investments come with the risk that you could lose some or all of your money.
You may better weather this risk by investing for the long term, which essentially means only investing funds that you would not likely need to touch for maybe five years or longer, so that the market has time to recover from downturns.
There are a variety of ways to start investing. If your employer offers a 401(k), that can be one of the easiest ways to start investing. Another option for retirement is opening an individual retirement account (IRA).
You could also open a brokerage account to help you target your financial goals. This is a taxable account, typically opened with a brokerage firm, that allows you to buy and sell investments like stocks, bonds, and mutual funds.
If you’re ready to start investing, you may want to speak with a qualified financial advisor who can help you establish your savings goals and risk tolerance and help you develop a personalized investment strategy.
Creating a SoFi Savings Account Today
If you’re looking to make more interest on your money, you may be able to increase returns by opening a high-yield account at SoFi.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
What does it mean to “gain interest”?
Gaining interest is similar to earning interest. It means that your money (the principal) is growing over time thanks to the interest rate being paid. The exact amount it grows will be determined by the interest rate, how long it sits, and how frequently (if at all) the interest is compounded.
How can you make money with interest rates?
You can earn interest through various types of accounts. High-yield savings and high-yield checking accounts typically offer better rates than traditional ones. Money market accounts, which combine features of checking and savings accounts, may offer higher interest rates, but often come with certain restrictions. Certificates of deposit (CDs) provide a fixed interest rate for money locked in for a set time period. You may also consider investing in bonds, which provide periodic interest payments until the bond matures.
How much interest does $10,000 earn in a year?
How much interest $10,000 will earn in one year will depend on the interest rate and how often the interest is compounded, if at all. If the interest rate is 3.00%, without compounding, it would earn $300. With daily compounding, it would earn $304.53. If the interest rate were 7.00%, the account holder would have $700 in interest at the end of the year with simple interest, and $725.01 with daily compounding.
About the author
Julia Califano
Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.
Article Sources
SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet
Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.
Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.
Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.
See additional details at https://www.sofi.com/legal/banking-rate-sheet.
We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
1SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
SOBNK-Q225-100