Maximize Your Savings. 2 Ways to Quadruple Your Returns

Interest rates are at an all-time low, but don’t let that stop you from making thousands more with your cash savings. If you’ve followed my posts up to this point, you most likely have a solid plan in place to reach financial independence. And as you know, one of the most important pieces of that plan is having cash available in case of emergency, as well as enough cash to make all of your purchases without incurring debt. Here we’ll explore two safe ways for you to gain massive returns on that cash savings.

CD Laddering

cd ladder

Example of 5 year CD ladder

What is a CD?

A CD is short for “Certificate of Deposit“. they are purchased from a bank, and they offer a much higher interest rate than a regular savings account. The trade off is that the funds cannot be retrieved without penalty until he CD has matured. What does that mean for you? Well, if you buy a 6 month CD, you must wait 6 months before you can access it. If you do retrieve it early, the penalty you would pay (which could be up to 6 months of interest depending on the terms) defeats the purpose of having the CD to begin with. So why does this make sense for an emergency fund, won’t you need this money in case of, you know, emergency?

How it works

let’s say you have around 5 months of emergency funds saved up, or $15,000, that you want to convert to CDs. You start out by buying 2 CD’s, one with a 6 month term and another with a 12 month term. In addition to this, you add $500 to your cash savings. Below are the amounts and interested rates in list form, as well as the maturity date:

  • $1,000 @ 1.65% interest, matures April 2014
  • $1,000 @ 1.75% interest, matures October 2014

Next month you manage to save another $500 cash, and you put $2,000 more into CD’s. So right now you have $11,000 in your cash savings, and $4,000 in CD’s. We use the same strategy of a 6-month and a 12-month, and here are out results:

  • $1,000 @ 1.65% interest, matures April 2014
  • $1,000 @ 1.65% interest, matures May 2014
  • $1,000 @ 1.75% interest, matures October 2014
  • $1,000 @ 1.75% interest, matures November 2014

Keep this up for 4 more months and you will have and your CD distribution will be as follows

  • $1,000 @ 1.65% interest, matures April 2014
  • $1,000 @ 1.65% interest, matures May 2014
  • $1,000 @ 1.65% interest, matures June 2014
  • $1,000 @ 1.65% interest, matures July 2014
  • $1,000 @ 1.65% interest, matures August 2014
  • $1,000 @ 1.65% interest, matures September 2014
  • $1,000 @ 1.75% interest, matures October 2014
  • $1,000 @ 1.75% interest, matures November 2014
  • $1,000 @ 1.75% interest, matures December 2015
  • $1,000 @ 1.75% interest, matures January 2015
  • $1,000 @ 1.75% interest, matures February 2015
  • $1,000 @ 1.75% interest, matures March 2015

You will have now 2 months worth of emergency funds available to you in cash while also gaining interest on another 4 months of emergency funds in CD’s. From this point on, every month that you do to not need to access any of your funds, you can roll it into a 1 year CD so that in 6 months all of your emergency fund can be gaining 1.75%. Even better, if interest rates go up, then you can purchase a new CD with a higher interest rate, leaving you the flexibility to reinvest your funds with no penalty.

So what’s the catch?

If you couldn’t already guess, this can be a little more tedious that just sticking your money into a savings account. But the fact that you are even reading this post probably means you are serious about milking your money for all its worth. Also, you will be locked into a lower interest rate for at least 6 months, but the returns you would miss out on are nominal since we are laddering the CD’s month by month and they can be reinvested very quickly.  Next, we’ll check out the second way to make your savings work for you.

Rewards Checking Accounts

It can be frustrating to watch your savings not only remain stagnant, but lose value over time due to inflation. Lucky for us, there are not-for-profit credit unions who are looking to compete with the big banks. The best part, because they are not-for-profit, they pass on the profits to you! These credit unions often times have great promotional rewards accounts. These are special accounts that have very high interest rates, and low fees, but often times many restrictions and requirements (everything has a catch, doesn’t it?).

The benefit to these accounts is that you can access it in an instant, and most of them offer better interest rates than CD’s currently.  While this will likely be temporary (as interest rates have no where to go but up), it is definitely an option if your emergency fund is small but you still want to get the most out of it.  Below are a few examples of these rewards checking accounts, their requirements, and their interest rates:

Consumer Credit Union’s Free Rewards Checking


  • 3.09% APY
  • No minimum balance requirement
  • No ATM fees- CCU will reimburse all ATM and surcharge fees
  • Free VISA Debit Card


  • Complete at least 12 Debit/Check Card point-of-sale purchases (transactions must be made without using your personal identification number (PIN) to count toward the minimum of 12 and must post and clear your account on or before the last day of the calendar month)
  • Each calendar month, one direct deposit OR one ACH debit OR pay one bill when using Consumers Credit Union’s free online bill payment system must post and clear your account on or before the last day of the calendar month
  • Access Online Banking at least once each calendar month
  • Receive eDocuments (enroll and accept the disclosure)
  • Maximum $5,000 balance

Lake Michigan Credit Union Max Checking Account


  • 3.00% APY
  • No minimum balance required
  • Totally free – no monthly fees
  • Free LMCU ATM usage
  • Up to $15/month reimbursement for non-LMCU ATM use


  • Direct deposit into your Max Checking account
  • Minimum of 10 debit card purchases per month
  • Minimum of 4 logins to home banking per month
  • Be eligible for and sign up to receive eStatements/eNotices
  • Maximum $15,000 balance

Avidia Bank eChecking


  • 1.36% APY
  • FREE debit cards
  • Foreign ATM transaction fees reimbursed
  • Other bank ATM surcharge fees reimbursed to you (up to $10 per statement cycle)
  • No maintenance fees
  • Full credit and access to our Avidia Rewards+ program


  • You must open your account online.
  • You must sign up for electronic monthly statements (eStatements)
  • Enroll in free Internet banking and sign in at least once a month
  • Use your debit card to make a purchase at least ten times per statement cycle
  • Have at least one recurring ACH transaction per month (such as direct deposit, automatic payment of a bill, etc.)
  • Maintain a monthly collected balance greater than $0
  • $25,000 limit

Arizona Bank Cash Rewards Checking


  • 1.51% APY
  • ATM refunds
  • Unlimited check writing
  • Free Debit Card
  • Free Online Banking with Bill Pay
  • Free eStatements
  • Free Mobile Banking4
  • Overdraft Privilege² up to $500 is also available on this account


  • $25 to open
  • Sign up for Direct Deposit
  • Simply have 15 or more signature-based purchases posted within the monthly statement cycle (Transactions at an ATM are not included)
  • Sign up for eStatements with a valid e-mail address

As you can see, you have quite a few options when it comes to rewards checking accounts, and it’s really up to you to decide what’s best for your situation.


The most important part of this post is to remind you that there is no reason to be earning .05% interest on a chunk of cash as large as your emergency fund.  If you only have %5,000 – $15,000 to invest and you want to maximize your interest, Rewards Checking is probably the answer.  If you want a longer term option, and are willing to put in a bit of work without limiting how much you can invest (Ok, that’s not completely true, that maximum is $249,999), you can ladder CD’s.

So, which route seems best for you? I’m interested in hearing your feedback, so leave a comment and subscribe if you like what you read here.