6 Better Places to Put Your Money Than a Checking Account

Keeping a big balance in your checking account feels smart, until you realize it's one of the easiest ways to lose money without noticing.

That cash likely isn't earning interest, and inflation keeps chipping away at its value every day. In other words, your "safe spot" for money is actually where it goes to shrink.

You want to keep enough cash in your checking account to cover short-term bills, but here are better places to keep your extra cash.

High-yield savings accounts are like traditional savings accounts, just with much better interest rates. Many pay 4.00% APY or more, and your money is still FDIC insured up to $250,000.

You can open one online in minutes, even if it's not at your current bank. It's one of the simplest ways to earn more on money you don't need for day-to-day spending. Most of these accounts pay more than 10 times the rate of traditional banks like Chase and Bank of America.

Compare some of the best high-yield savings accounts available and open one in minutes.

Every extra dollar sitting in your checking account could be a dollar freeing you from debt.

Say you have a $5,000 credit card balance at 19% interest and pay $125 a month. You'll spend over $2,700 in interest by the time it's gone. Use extra cash to pay that off faster, and you'll save thousands of dollars.

Pro tip: The best balance transfer credit cards can offer you almost two years of 0% interest. Compare the best ones here.

A money market account (MMA) sometimes combines the best parts of checking and savings.

Many MMAs now pay over 4.00% APY and still let you write checks or use a debit card. As long as your bank or credit union is FDIC- or NCUA-insured, your funds are protected up to $250,000.

Pro tip: Make sure you read the fine print. Depositing and accessing your money can be a bit of a pain with some money market accounts.

A certificate of deposit offers a fixed interest rate for a set period. Terms typically fall anywhere from three months to five years.

You'll lock in your rate even if others drop, but you'll also face a penalty if you withdraw early. CDs are great if you want guaranteed returns and don't need immediate access to the funds.

With today's market uncertainty, it's not a bad idea to lock in a higher rate long term. See some of the highest CD rates on the market here.

If you're not already maxing out your IRA or 401(k), that's another smart place for extra money.

Even small, consistent contributions can grow meaningfully over time thanks to compound interest and tax advantages. Instead of letting inflation chip away at your checking balance, you'll be building long-term wealth.

Once your savings and emergency fund are set, consider putting extra cash to work in a brokerage account.

It's flexible, easy to open, and gives you access to stocks, ETFs, and index funds that can grow far faster than cash sitting idle. Just be mindful of your time horizon -- this is best for money you can leave invested for years.

If you feel like you need some help with this, our partner SmartAsset's no-cost quiz makes it easier to find a fiduciary financial advisor.

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