How to Earn a Higher Return Without Taking More Risk

By Charlie Bilello

12 Sep 2022

Inertia is a powerful force – and if you’re like most Americans – you’re still earning almost nothing on your cash because if it.

According to, the national average yield on a savings account is a paltry 0.13%. Many of the largest banks (Bank of America, Chase, HSBC, Wells Fargo, and Citibank) are offering even less.

Meanwhile, what’s the highest FDIC-insured savings rate currently available?

Over 2.6%.

Note: Highest Yield via as of 9/12/22

There are many banks now offering savings yields above 2%, and the numbers should only grow in the coming weeks and months.

Why are yields moving higher? The Federal Reserve controls short-term interest rates, and at long last they are moving back to a more normal monetary policy.

Since March of this year, they have hiked interest rates by 2.25%, and are expected to hike rates by another 1.50% before the end of the year.

So why would anyone still accept a 0% return on their money when they could be earning 2.61%?

Inertia, which states that an object at rest stays at rest until acted on by an external force.

The Federal Reserve has held short-term interest rates near 0% for a majority of the last 14 years. As a result, savers have rested, likely assuming they would never earn a decent yield on their cash again. But the times they are a-changin’, with inflation hitting a 40-year high and the Fed raising rates in an attempt to bring it back down.

In the world of investing, earning a higher return almost always requires taking on more risk.

But in the world of FDIC-insured savings (up to $250,000 per depositor, per bank, per account type), the linear relationship between risk and reward does not hold. If you’re currently earning 0% on your cash, you can immediately bump that up to 2.61% without incurring any additional risk. You just have to open up a new account and transfer the money. It’s one of the only free lunches that exists and taking advantage of it is entirely within your control.

So what are you waiting for? Let this post serve your external force. Get moving.


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