First Person: The Solution to 0.03% Interest on Savings

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Currently, the savings rate at our bank for balances under $10,000 is .03 percent. Yes, you read that right, .03 percent. Personally, I tend to wonder, why even bother? And such low rates raise the question as to where else to put savings. Sure, there's always the stock market, but it isn't always the safest spot for savings nor does it necessarily guarantee a set rate of return.

So what other options are out there for earning a little something extra on savings?

Put money in savings

What!? Put money in savings? Isn't not putting money in savings the whole point of this article? Well, not necessarily. Even though interest rates are low, they are present nonetheless; and having cash available not only as an emergency fund but as a secured liquid option to dip into for other investments should they present themselves can be an attractive option. Sure, inflation could take its toll on said funds, but sometimes a gradual reduction in buying power is better than taking silly risks on other investments in an effort to try to force higher returns.

Pay off debt

Paying off debt can be a great option for putting money to use in a way other than low-interest savings. According to, the average credit card debt per US household is $15,799. Putting cash toward paying down such debt -- where interest rates can easily hit the double digits -- can have you, if not making money, at least diminishing the amount of money paid out to others.

Buy in bulk

One of our favorite ways to put our extra cash to use is through "investing" in bulk or discounted products. From diapers and baby wipes, to longer-lasting food products, toothpaste, and similar long shelf-life items, we find that buying in bulk -- as long as we use what we buy -- is a great way to put our money to use rather than letting it stagnate in a savings account.

Consider savings bonds

I've been a long-time fan of government savings bonds. No, they're not very exciting, and no, the return isn't awesome, but there are other advantages.

Series-I savings bonds can beat -- or at least keep up with -- government stated inflation rates, which when interest rates are low can certainly be a positive. Also, such bonds are not subject to state or local tax, and depending upon their use, may even be exempt from federal taxes as well -- a huge potential positive.

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What about commodities?

Personally, I like commodities, but they can sometimes be quite volatile and I look at them as more of a long-term investment. I prefer physical commodities over paper markets, but I understand that most people -- including myself -- can't or won't hold large quantities of grain, metals, or units of energy.

This however doesn't mean that there isn't room for buying things like bulk food to stockpile for future use, collecting metals in coin form, or finding ways to save on energy through reducing gas consumption with our vehicle or utility usage in our home. And the great thing is that such investments are all around us in our everyday lives.

Real estate

Housing values are still low in many places, and so are mortgage rates. For those on the lookout, buying a home now might be a good way to put money to use, but for those who own a home already, they could consider putting extra savings toward a mortgage.

Even with mortgage rates at 3 or 4 percent, putting money to work at those rates could be better than letting it sit in a savings account earning little or nothing at all. This is what we did, putting additional funds toward our mortgage -- which was over 5 percent at the time -- and in turn, we paid down our mortgage faster and eventually become mortgage free.

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The author is not a licensed financial or tax professional. The information provided in this article is for informational purposes only and does not constitute legal, financial or tax advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.

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