Top Alternatives to Savings Accounts

Lidia Staron, author at OpenLoans
Lidia Staron   Head of Content
Personal Finance
I enjoy navigating people through important financial decisions.

Plenty of individuals are turning away from traditional savings accounts and adopting alternative methods. Many are in search of high-yield and fast growth options for their money.

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Why Look for Alternatives?

Although a traditional savings account is a tried and true banking option, many people look for higher-yield alternatives. Savings accounts provide steady growth and security. However, some may opt for alternatives that can offer higher interest rates or faster growth.

There are many ways to invest and make money work for you, and this guide explores the top alternatives.

U.S. Treasury Securities

U.S. Treasury securities (T-bonds) are a relatively safe investment option. U.S. Treasury securities are fixed-income securities issued by the government to raise money for federal operations. T-bonds are considered secure because the U.S. government fully backs them. T-bonds offer semi-annual returns and longer maturation terms, ranging between 10 and 30 years. However, these securities usually have lower returns compared to other options.

Real Estate Investment Trusts

Exterior of apartment building. A Real Estate Investment Trust (REIT) is a company that owns, operates, and finances several real estate properties on behalf of its investors. REITs offer investors dividends from the real estate properties they manage. This allows investors the opportunity to earn a passive income from real estate without having to manage or own the property.

Peer-to-Peer Lending

Another savings account alternative that has grown a lot in recent years is the P2P lending market. You become a lender in this scenario, earning interest off a loan you offer to a borrower. Again, you get started by entering an online lending marketplace where you can lend borrowers money at a pre-agreed interest rate.

It’s risky, of course. You may lend to people who have been rejected elsewhere. If someone doesn’t meet the five C’s of credit, it may not be wise to lend to them.

CD Laddering

Certificate of Deposit Laddering (CD Laddering) is a savings strategy that aims to take advantage of higher rates while still making funds available for use. CD laddering invests money equally across multiple certificates of deposit with different terms.

A certificate of deposit is an investment option that earns interest on a lump-sum deposit. However, the CD matures only if the money is untouched for a predetermined period of time.

The CD laddering strategy involves opening multiple short-term CDs. Then, you have the option to withdraw funds or renew the CD for a longer term. This method allows you to benefit from the higher interest rates of longer-term CDs. Additionally, you still retain frequent access to funds with the short-term CDs.

High Dividend Stocks

Investor buying and selling stocks on computer.Despite the volatility of the stock market, investing your savings may offer a quicker way to grow your money. It is important to conduct thorough research into the history of the company and stock you are investing in. Ensure that the company has sustained growth over several years. Also, examine the overall sector and economic conditions before committing to stock investments.

If you are new to the stock market, consult with a stockbroker to set up a mutual fund. A professional money manager will invest your funds for you and manage the portfolio on your behalf. This is a relatively secure investment option as it provides portfolio diversification from a professional. However, mutual funds managers typically charge high fees for their services.


Bonds can be another safe way to invest. Unlike mutual funds that move your money around all the time, a bond fund allows your money to stay safe in one place and keep gaining monthly dividends based on capital appreciation and interest payments. You’re effectively “buying into” debt and making a share of the revenue.

Blended Portfolio

A blended portfolio is made up of a mix of different assets. You can buy into one of these funds, usually run by an external company. Blended portfolios, or blend funds, are meant to provide the advantages of growth and security by diversifying your portfolio.

For additional security, a financial advisor can create and manage a blend fund for you.

Online Savings

Individual checking online banking account on laptop.Online savings accounts will often have some excellent promotional rates. Some may offer you a certain rate on the assumption you put a certain amount of money each month into the account.

Setting up multiple pots of online savings can increase your promotional offers and, in turn, savings. Consider shopping around to find the best rates and terms for new account holders.

Money Market Accounts

A money market account, or money market deposit accounts, can give you a relatively low-maintenance way to make some money out of your savings. They’ve got a higher interest rate than a lot of other accounts, and you may even get a debit card with them so you can use and access the money. However, remember that they don’t have all the flexibility of some debit accounts as they have extra restrictions. Regardless of the restrictions, the higher interest rates may be worth taking advantage of.

Money Market Funds

Another savings account alternative is a money market fund, which is a mutual fund investing in liquid assets and instruments, such as cash or debt-based securities.

Despite the short-term nature of the investments, they offer a relatively low level of risk and can bring you far better returns than some other methods of investing.

In Conclusion

In truth, the approach you should take probably depends on how much money you have available to invest and the length of time you’re willing to let it mature. If you have the time and money, you may choose to utilize more than one of these alternatives simultaneously. This can help mitigate risk while increasing the growth of your funds.

These are some alternatives that can help your money grow faster than a savings account.

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