For years, I did what everyone told me to do. Open a savings account. Put money in it. Watch it grow.
Except it didn’t grow. Not really.
I’d check my balance and feel good seeing those numbers go up a little each month. What I didn’t realize was that while my money sat there earning next to nothing, everything around it — groceries, gas, rent — kept getting more expensive. I wasn’t building wealth. I was barely treading water.
Here’s the truth nobody tells you when you’re younger: a traditional savings account at most big banks pays you next to nothing. We’re talking a fraction of a percent. Meanwhile, inflation chips away at what your money can actually buy. So technically your balance goes up, but your money is quietly losing power every single year it sits there.
I wish someone had explained this to me decades ago instead of letting me believe a savings account was “safe” and that’s all that mattered.
So what should you actually do instead?
You don’t need to become a stock market expert or take big risks. There are simple, low-effort options that do a much better job than a basic savings account.
A high-yield savings account is the easiest first step. These are typically offered by online banks and fintech companies, and they pay significantly more interest than the big traditional banks. Your money stays just as accessible and just as safe, it simply earns more while it sits there.
I personally use SoFi for this. It’s an online bank that offers a much stronger interest rate on savings than what you’ll find at most traditional banks, and it’s simple to set up.
I also use Chime, which works a little differently. It’s not a traditional bank, but it partners with real banks to hold your money, and it offers automatic savings features that help you save without even thinking about it. If you’re someone who struggles to remember to move money over, Chime makes it happen for you in the background.
Certificates of deposit, or CDs, are another option if you have money you know you won’t need for a while. You lock it in for a set period of time in exchange for a better interest rate.
And if you’re thinking longer term, even a small amount moved into a low-cost index fund can outpace inflation in a way a savings account never will. This isn’t about gambling. It’s about giving your money a real chance to grow instead of slowly losing value while it just sits there.
One more thing while you’re at it
If you want more money to actually move into savings, take a few minutes to check what’s quietly draining your account every month. I use Rocket Money to track my subscriptions and cancel the ones I forgot I even had. It’s an easy way to free up extra cash that can go straight into one of the savings options above instead of disappearing every month.
The bottom line
I’m not telling you to abandon savings altogether. You still need an emergency fund and money you can get to quickly. But for any money that isn’t an emergency fund, it deserves to actually grow, not just sit there pretending to.
If you’re over 50 and just now hearing this, you’re not behind. You’re right on time. The best moment to start doing better with your money is always today.
