How to Maximize Financial Rewards Through Your Banking Account

2. Save while you spend with a rewards checking account

If you often use a card to complete transactions, consider a financial service provider that offers a rewards checking account. These aren’t common, and opening one often involves a few more conditions and caveats, but overall they’re a fantastic way to supplement your savings.

The principle is incredibly simple. You receive a reward when you swipe or tap your card to make purchases. Cashback rewards, which return a percentage of the money you spend, are most common.

3. Earn high interest with certificates of deposit—and ladder them

You can earn a significant APY on your savings with a certificate, otherwise known as a certificate of deposit (CD). Essentially, they work like this:

You consent to leaving a sum of money in the CD for a fixed term, and you need to leave it there until the term expires or pay an early withdrawal penalty.

• Terms vary in length—some are as short as six months, while others are as long as four or five years. But usually, the longer the term, the higher the APY.
• Once the term has ended, you can access your money—and all the interest you’ve earned on it—or roll that balance into a new CD and keep on saving.
• You can construct a so-called “CD ladder” by staggering the number of CDs you open and the length of their terms. With this strategy, you can make sure you always have a pot of money growing at a high APY, even as some of your CD terms end and funds become available.

For standard banks, a 4% APY is considered a good rate for a certificate with a five-year term. Local credit unions can often offer even better rates. For example, take a look at Citadel's current rates and terms.

Maximizing financial rewards also means minimizing banking fees

We may be biased, but credit unions are typically your best option for making your savings work harder. Because credit unions are owned by account holders (a.k.a. members) instead of shareholders, we don’t have to pay dividends to investors and can funnel their profits straight back to their members.

Typically, that means lower and fewer fees, and higher APYs on high-yield savings accounts and CDs.

Take advantage of opportunities to open an account with a bonus

One final piece of advice: some financial institutions provide bonuses simply for opening a new account with them. There’s no better way to receive immediate, tangible rewards than that.