How to make your money work for you and earn interest with tips by 7 On Your Side

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Friday, July 5, 2024
How to make your money work for you and gain interest
7 On Your Side's Nina Pineda has tips on how to earn the most interest with your money.

NEW YORK (WABC) -- It's free money Friday and this long Independence Day weekend may be time to think about how to liberate more of your money and make it work smarter for you.

Don't lose out on interest because your money is sitting around earning a fraction of what it could be.

Bill Harris the CEO of Evergreen, the former CEO of PayPal and Intuit, which runs Turbo Tax, explains what it means for the average investor.

"If you are at CitiBank, Wells Fargo, Bank of America, or Chase, all of them pay 0.01% on your checking account," Harris said. "You are giving them your money and they are keeping 5% and giving you nothing."

If your checking account paid 5% banks would earn

- $283 million each day

- $103 billion across the year

And what it means for someone who's got $16,000 in their bank account they're losing close to $1,000 a year.

"We tell people that all the time that you should look to online banking, look to something paying your more than a traditional account on what you're saving. Part of your platform is putting money in the US Treasury," Harris said. "The US Treasury bill, this is where the government is loaning money, and so it's backed by the full faith of the U.S., this is the safest thing you can possibly invest it."

The other two things that are great about it are the yield is high, currently 5.3%, and for people in New York with high tax rates, New York State and city 13.5%, treasury bills are exempt from state and local taxes.

"People don't realize that they are paying taxes just on their bank account," Harris said.

Students and young people can look at Evergreen, online banking Chime, and SoFi pay more than the average checking account.

"Yes, but the real place to look is high-yield savings accounts. You're not going to find high yield. Except for what we're doing at Evergreen, you're not going to find a high yield checking account so you need to use Allied, Marcus, Discover, or American Express, which will pay you 4% or more," he said.

If you aren't putting your money somewhere, you are losing out on truckloads of interest.

ALSO READ: Hacks to save money when booking your next vacation

7 On Your Side's Nina Pineda has tips on saving money when booking your next vacation.

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