How to make the most of your savings

The statistics are alarming: According to a Bankrate survey from earlier this year, more than half of Americans feel uncomfortable with what they have saved in their emergency savings. And only 44% believe their savings can cover $1,000 in expenses.

So if you have a savings account, especially an emergency fund, that covers three to six months of emergency expenses, that alone is worth a pat on the back. Savings are crucial to financial health, but sometimes just having money in your account isn’t enough. By putting your savings to work for you, you will reach your financial goals faster.

Park your money in a high-yield savings account

I say it all the time: Open a high-yield savings account. HYSAs are all the rage right now, and for good reason. These special savings products pay an above-average APY (Annual Percentage Yield) compared to regular savings accounts. Many banks also offer HYSAs for free and you can open them with very little money up front.

You also earn interest on the interest payments (what in the financial world is called “compound interest”). Pretty nice perk for your emergency fund, right?

Maximize your savings: The best high-yield savings accounts

It’s easy to open a HYSA and many online banks will approve you fairly quickly. There are so many options for a good, high-yield savings account – but if you need ideas on where to turn, check out my favorites here.

Benefit from automation

Save without lifting a finger using automated features like Roundup Savings. Rounding functions are offered by many banks and financial institutions. They work by rounding up the change on your purchase and automatically depositing it into your savings account. For example, if you spend $12.49 on your lunch, the total amount posted will be $13.00 and $0.51 will automatically be credited to your savings account. This may seem like petty cash, but it can really add up over time.