What is the Best Place to Save Money and Earn Interest to Make Your Money Grow?


Dear Steve,

My husband and I have about $50,000 on hand, we can’t invest it because we need it to put new siding on our house, but we are also trying to save more money to add a garage to our home. Are there any quick places to put this cash to grow it while we save or just basic low-earning savings?

Thank you!



Dear Jess,

A basic low-earning savings account is a horrible place to make money grow, but it is an excellent place to store money you might need fast in case of an emergency.

It sounds as if this saving period might be longer than a year. If that is true, do I have a deal for you if you want to make a guaranteed return of nearly 10%?

It might not be the sexiest investment, but oh, the return.

The United State Treasury Department issues Series I Savings Bonds. Sounds boring, right?

These bonds are guaranteed, protected, and pay a respectable rate of return.

Below is what I Savings Bonds have paid since 1998. Not shabby at all. The only downside is you can only purchase $10,000 per person annually.

What is the Best Place to Save Money and Earn Interest?

I was so blown away by the interest rates the I Savings Bonds pay I just purchased a $10,000 bond. I actually put my money where my advice is. I then talked to a friend and pointed the returns out to him, he jumped at it as well.

You can buy Series I Savings Bonds in your name, and your husband can purchase more in his name, which takes care of $20,000 of your money.

If you want to learn more about the Series I Savings Bonds, read the FAQs.

Off the top of my head, I can’t think of another guaranteed return that is as good as the I Savings Bonds.

One place I like is Betterment. I’ve used them for years, and I find their fees low and the ease of managing your account very good.

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They can provide investment advice if you decide to put more of your available cash in the stock market. For example, you can get a lower return with more protected funds or a higher return with more exposure to wider high or low returns.

I can’t judge your level of comfort and risk when investing; only you can. So, if you decide to look at Betterment, then you can spend some time in the Betterment Resource section, looking around. They also offer a call with a Certified Financial Planner for tailored advice.

A staged approach makes sense as well in growing the cash on hand. There is no need to put all your money at risk in one investment vehicle.

If you put $20,000 in I Savings Bonds, you could put $10,000 in very low-risk stock market bonds and $10,000 in a more aggressive stock fund, leaving $10,000 in your low-paying savings account.

I’m not saying that’s what you should do; it’s just a strategy to spread risk and returns.

But this is one person’s point of view to give you different ways to think about this.

If you want to calculate what your rate of return will be, select the semiannual compounding, and use this calculator.


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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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