How to Earn More on Your Savings for the Rest of 2017

The year is running out, but there is still time to grow your money tree before 2018 dawns.

We’re more than halfway through 2017. Perhaps you were full of good intentions to grow your nest egg way back in January, but things haven’t quite lived up to your hopes as the year has unfolded.

Fortunately, there is still time to turn things around. With a little more than five months left in 2017, you can still get your finances on a better pathway before 2018 dawns.

Getting a better return on your money is almost always worth the effort. As we recently reported, if you invest $100 a month in a savings account that earns 0.45 percent, you’ll have $12,377 in a decade.

However, invest that $100 into a stock portfolio that earns 4.7 percent — a very conservative return by historical standards — and you’ll have $15,527 after a decade. That’s an extra $3,150. And history suggests that a stock portfolio is likely to do much better than 4.7 percent.

To turbocharge your finances in the last half of 2017, consider doing the following:

1. Compare interest rates on savings accounts

A recent survey by MoneyRates found that interest rates recently have increased for virtually every type of bank account offering, and across banks of all sizes. Shopping for the right savings account online allows you to compare rates in minutes. Check the websites of banks you frequent, as well as the websites of other banks.

Don’t stop with banks. Credit unions often offer competitive rates. Check them, too.

2. Carefully weigh buying individual stocks

Yes, individual stocks can be risky. Choose the wrong company, and you could lose much — or even all — of your investment. You might increase your odds of making money if you buy shares of companies that are stable and that pay dividends higher than the interest rates you’ll find at banks.

Still, there is no guarantee that any stock will pay off. Once-stable, forward-moving companies such as Eastman Kodak have taken a mighty thrashing in recent years.

All investors — especially first-time investors — should carefully analyze any stock prior to purchasing it. Never make a hasty decision. And once again, remember that no matter how much due diligence you do, no stock is guaranteed to rise in price, or to continue to pay large dividends.

For more on the potential pitfalls of buying individual stocks, check out “Why Picking Stocks Can Be Disastrous for Your Nest Egg.”

3. Carefully weigh buying individual bonds

Likewise, it’s important to tread carefully when buying individual bonds. When you invest in bonds, you’re basically loaning money to business or the government for the promise that you will be paid back with interest. Sounds perfectly safe, right?

Well, not exactly. When interest rates go up, bond prices go down.

So are bonds safe in this economy or not? No one knows. Late last year, MarketWatch published a story warning that investors could lose 40 percent of their money invested in supposedly “safe” bonds if interest rates were to rise. Then in March of this year, another MarketWatch writer suggested that now is a great time to buy bonds.

If you are uncertain of which way bond rates are likely to go, consider using a strategy called “laddering.” It involves buying bonds that mature at various times, and it can offer some protection in a rising-rate environment. Ask a financial pro for more about how laddering might work for you.

4. Consider mutual funds

Mutual funds allow you to buy a large basket of stocks through a single investment. When you purchase such funds, you get shares in hundreds or even thousands of companies. You can also purchase mutual funds that contain bonds, or a combination of stocks and bonds.

If mutual funds pique your interest, be sure to check out “Ask Stacy: How Do I Invest in Mutual Funds.” As Money Talks News founder Stacy Johnson writes, for many people, an index fund is the best type of mutual fund:

It’s a popular option because it’s essentially an investment in the American economy. If you think the American economy will be bigger years from now than it is today — a pretty good bet — it’s a solid long-term investment.

5. Look into other options

There are plenty of options beyond bank accounts and classic stock and bond investments. Examples include:

  • Peer-to-peer lending. Peer-to-peer lending allows you to loan money to individuals through an online platform such as Lending Club or Prosper. Interest rates vary.
  • Real estate investments. This is another way to build your funds. However, like stocks, there’s no guarantee that you won’t lose money. Don’t move ahead before you check out our story on finding the perfect rental property to buy.

Do you have other suggestions for building your wealth during the rest of the year? Share them by commenting below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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