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Earning Interest

Everyone knows the importance of saving money. But start looking into specific savings account options and interest-earning opportunities, and suddenly everything starts feeling a whole lot less straightforward. Luckily, you have plenty of options.

Everyone knows the importance of saving money. But start looking into specific savings account options and interest-earning opportunities, and suddenly everything starts feeling a whole lot less straightforward. Luckily, you have plenty of options to help support your savings goals. Whether you’re saving for home emergency expenses, a child’s future, retirement, or just an upcoming sneaker drop, we’ve got some savings account insights for you to consider.

What Should I Look for in an Interest Earning Account?

Shopping for an interest-earning account? Consider the four main factors for investing: how much you’ll actually stand to make (AKA interest), accessibility to your money (or liquidity), account variables (like fees), and associated risk. Let’s break those down:

So, How Much Can I Actually Make?

An interest rate, or sometimes called a dividend rate, is the amount of money a bank will pay you for keeping your money in one of their accounts. A high interest rate = more money, and everybody likes more money. Dividends can pay out anywhere from daily to annually, and will either be based on the amount in your account at that time or the average amount invested in your account, depending on who you bank with.

Most financial establishments will offer a rate called an Annual Percentage Yield, or APY. This number is based on the idea that the money in that account will keep growing with time, so previously earned dividends in your account can grow interest on interest. When it comes to building interest, time is your best friend. Even a small amount invested now can grow and compound over time into a sizeable sum!

Want to get a better picture of how your savings could grow? Start number crunching with our Savings Calculator

How Accessible Is my Invested Money?

When people talk about how accessible your money is, they may refer to it as ‘liquidity’. An account with high liquidity means that you have access to your money any time–you can pull any amount out with no (or very little) fees. Traditional savings accounts are a high liquidity option. On the other hand, a low liquidity account means that your money is pretty tied up: it’ll take some degree of time to cash out, and you could incur significant fees. A popular low liquidity option is a Certificate of Deposit, or CD.

What Are the Account Variables, Anyway?

It should come to no real surprise here, but details are super important. When you’re looking to open an account and start earning interest, don’t forget to consider account fees, restrictions, and other features. Some banks have annual or minimum balance fees that can really sneak up and eat into the money that you earn. Don’t forget to check the number of account withdrawals allowed, and if you’re allowed to write checks from that account. If you’re ready to open an account with Westerra, schedule a time to meet with one of our experts–no question is too small or too silly.* Schedule an Appointment

How Risky Is It?

You may have heard the phrase “With risk comes reward.” But another truth can be, “With risk comes the potential for loss.” which is also just as true. The reality is, most financial advisors recommend folks have a few diverse places to invest, with a mix of both lower-risk and higher-risk investments.

Two risk-related goals for consideration: first, we recommend setting a goal of building a strong safety net of savings, equal to 6 months to a year of your living expenses. The second goal: aim to have most of your additional savings invested in some kind of interest-earning account. Outside of a traditional savings account with immediate cash needs, your money should be making money–even a small amount is better than nothing.

Types of Interest-Earning Accounts

Gone are the days of stashing cash under the mattress. (And if you’re still doing that, well, it’s probably time to head into a Westerra. No judgement–we really are here to help!) Different types of savings accounts can offer different interest rates, account features, ease of withdrawal and more. Here are a few common savings account choices:

Traditional Savings Accounts

Many people opt for Westerra's traditional savings account to achieve their short-term savings goals. This account is also an excellent option for children, thanks to its low account minimums. If you have a young one in your life, consider helping them start building healthy saving habits. After all, financially savvy adults often begin as well-educated kids!

Reverse Tier Interest Earning Accounts

Most major banks reward large, cash-flush accounts with generous interest rates. But let’s be real, most of us don’t roll like that. That’s why opening a reverse-tier interest-earning checking account with Westerra is a great idea: you’ll earn bigger returns on smaller balances and smaller returns on bigger balances. Curious to see how much you could be making? Learn more and try our calculator!

Money Market Accounts

Money Market Accounts can be a fantastic, low-risk option for savers, offering higher interest rates and the benefit of earning more as you save more. However, they often come with higher minimum account balance requirements, sometimes up to $10,000, which can be a barrier for many.

Westerra’s Money Market Account is designed to be accessible and rewarding. It features no monthly fees, no withdrawal limits, and no minimum deposit or balance requirements, making it a great choice for everyone. Plus, the more you save, the more you earn with its competitive interest rates. Additionally, it offers the liquidity you need, allowing easy access to your funds whenever you need them.

For those looking for even more benefits, the Money Market Select account offers higher interest rates with a few additional requirements. You'll enjoy no monthly fees or withdrawal limits, but you need to maintain a minimum average daily balance and make at least 10 qualified Westerra consumer debit/credit card swipes per statement cycle which ends the last day of the month at 6 p.m. This account also provides the same liquidity, ensuring your funds are always accessible.

Certificates of Deposit (CDs)

You may have heard of CDs before–and no, not the song-playing variety of the 2000s. A Certificate of Deposit will generally offer higher returns than a money market or a regular savings account, but your funds aren’t easily accessible for the duration of the CD. (You CAN get your money out early, but that typically incurs a fee. We don’t recommend doing that.)

For those reasons, we recommend CDs for those who have a decent amount saved and ready to invest, and don't need that money for a while. At Westerra, you can find CDs with flexible terms to suit your needs.

Not sure where to start? No problem. Our expert employees are here to help get your money making money. Stop into your local branch and get the conversation started.

The best time to start earning interest is today.

*Please note that Westerra employees do not have the ability to offer tax advice, legal advice, or investment advice. For specific advice, please consult with a qualified professional.

For more information on Westerra products and features please visit our Disclosures Page.

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