Money Talks: Earning More on Savings

Nothing is more a double-edged sword than interest rates. Today we're at historic lows - great for borrowers, but terrible for savers.

Making more on your savings isn't easy, and it's not risk-free, but it is possible. Let me count the ways...

First, shopping. Online rate searches make shopping for higher savings rates a breeze. But don't stop there. Because they're non-profit, credit unions often offer higher rates than big banks.

Then there's Wall Street. While investing in stocks obviously entails risk, there are plenty of stocks that pay dividends far exceeding the measly rates on savings accounts. For example, at its recent price of $37/share, AT&T pays 4.7 percent.

Not enough to buy individual stocks? That's cool. You can use mutual funds and get in for as little as $25 a month. Next idea: Bonds. They're just I.O.U.s from corporations or government agencies, and just like with stocks, you can use mutual funds to buy into those. But do be careful... if interest rates go up, bond prices can go down.

An idea that's simpler to understand? Peer to peer lending at sites like Prosper or Lending Club. You loan money out to individuals, and collect interest.

And finally, real estate. I recently bought this fix-up house. When it's finished, I'm hoping the rent will pay me about 5 percent on my money. And when the market rebounds, some appreciation too.

Now, there's no free lunch. All these ideas require taking some degree of risk and study. And if you can't take the risk, or can't put out the effort, then there's only one idea left: wait. Sooner or later interest rates will rise and the scale will tilt back to favoring savers. Want to get more details? Go to and do a search for investing.

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