Don’t Forget To Optimize The Return On Your Savings

Whatever asset class you invest in, it's always go to optimize the return. Even if you are just saving money in a money market account, you should optimize the return when you can.

Data by the Federal Reserve Bank of St. Louis (FRED) reports the national average on non-jumbo money market accounts deposits (i.e. less than $100,000) is a miserly 0.1% in 2022.

That's no good when you can optimize the return on your savings with an online bank. But rates are finally going up to counteract ~7% inflation post pandemic.

Optimize The Return On Your Savings

CD rates have also plummeted. The current national rates for CDs are only 0.22% for 1-year, 0.49% for 3-year and 0.78% for 5-year. That's a far cry from the 4.1% I used to get in a CD that sadly expired in 2017. Thankfully, I reinvested the CD proceeds into stocks, real estate crowdfunding, and bonds, which have all done well since.


Given the low rates, investors have bid up income producing assets such as rental properties, REITs, and bonds. Stocks have certainly been a beneficiary as well. The question on every investor's mind now is: how much have income-producing assets risen due to fundamentals versus a Fed-induced frenzy? And should I optimize the return on my savings instead of continue to invest in higher-risk growth stocks?

Cash Optimization Plan

In order to optimize the return on my cash, I've conducted a deep dive on my current cash holdings. I am aggressively saving in anticipation of a two-year fade. Given I'm in cash hoard mode, I've been looking for better ways to optimize my $200,000+ in savings.

Current main money market savings account Financial Samurai
Current cash balance earning less than 0.2% a year.

The quick skinny is the CIT Bank savings account pays a leading 0.4% interest with no fees for account balances of $10,000 or more. That's a great rate compared to the <0.2% I'm currently earning at Citibank.

Now that I think of it, I've already forgone over $1,500 in savings interest income because I've been so focused on saving cash and forgot that I should also be optimizing my cash as well!

My plan is to keep $200,000 – $250,000 in savings through the end of the year in order to potentially buy a higher end home that has declined by 10% in value or take advantage of other investment opportunities. Any cash accumulated beyond $250,000 will be used to pay down mortgage debt or invest in tranches when there is a greater than 3% correction in the S&P 500.

If I don't optimize my $200,000 – $250,000 savings over the next two years, I'll be missing out on $4,000 – $5,000 in interest income. What a waste. It's time to make a change.

Interview with Katie Linendoll – Optimize The Return On Life

As part of Capital One's outreach I got to interview Katie Lindendoll, a TV host, speaker and journalist, focused on technology and gadgets. Katie is best known in her role as tech contributor to the TODAY Show and for winning an Emmy Award for her work on ESPN’s SportsCenter.

In addition, Katie owns her own content production business, hosts a tech podcast ( and travels the world as a keynote speaker. It's always fun to learn from successful people in different fields. 

You’ve had quite an exciting career. Tell us about a couple of your most memorable and unusual work experiences.

I am always on the hunt for a captivating story that I can share with my audiences.

Some of the most unique opportunities include:

  • Meeting with a native tribe in the Serengeti. I am fascinated by cultures and I was so intrigued to learn they sustain on a half a cup of blood and half a cup milk everyday until late evening.
  • I’ve covered a lot of unique underwater reports including diving with NASA and European Space Agency astronauts in the world’s only underwater laboratory off the Florida Keys in a semi annual program called NEEMO (NASA Extreme Environment Mission Operations) where astronauts live underwater to simulate microgravity and perform select tasks and operations from 6-18 days.
  • Lived cumulatively for several weeks on the island of Bermuda to tackle a story for CNN on the invasion of the lionfish (an invasive predator species native to the Pacific and now devastating Atlantic eco-systems).
  • What I find interesting and an on-going challenge is packing for these adventures – compact technology is key for long days and unique terrains. The breadth of options to film with alone these days still blows my mind and fortunately now I can pretty much get hands on anything I need from drones to custom underwater housing as its incredibly important to bring back the best visuals to fully tell the story.

Often my curiosity leads to the next story. I have to be truly fascinated in the piece to cover it. Also, I love to optimize the return on my savings and investments as well.

What do you love about Capital One that led you to partner with them?

I’ve been a Capital One client for years. I have nearly 30+ freelancers working under me and finances must be kept organized. When I have a finance question, I don’t have a lot of time to get to the bottom of it. Capital One has always made it easy and accessible for me. Capital One also helps optimize the return on my savings.

Describe two of your own financial hacks that can help people achieve financial freedom faster.

1. Declutter and digitize. How many people have stacks of magazines cluttering up their house? Why not get an unlimited digital subscription to more than 175 top magazines (including back issues) for just $10 a month (vs. nearly $10 for each year-long subscription) – which is even accessible on up to five devices! Not to mention eco-friendly.

2. Automate your bill payments. You work hard for your money. Don’t lose it to late fees! By scheduling automatic payments with features such Capital One’s Online Bill Pay, you’ll have better peace of mind that your bills are being paid on time, every time.

What are some ways we can leverage technology to improve our financial well-being and happiness?

Technology is continually evolving and giving people more ways to make their lives easier so you can enjoy what matters most to you. Voice-activated technologies hold a lot of promise to make our lives easier. With Amazon Alexa-enabled devices like the popular Amazon Echo, you can download “skills” that allow you to get the weather, sports scores and even news updates.

What changes would you like to see in the realm of personal finance in the U.S.?

Outliving means is certainly a problem. Swiping a credit card in the moment will work, but in the long term, many face the reality of accumulated debt.

I would love to see people be more responsible in their purchases and spending. Using alerts, like the personalized account alerts from Capital One, allow you to keep up on all your banking activity, and will help keep you honest and accountable.

How do you use technology and gadgets to keep your own finances in check?

I’m a very visual and hands on learner, but it can be hard to stay organized when I’m always traveling on-the-go. I best comprehend my spending habits when I can see where I should be cutting back and when it is all laid out for me. When it’s in front of me in a pretty chart, it’s hard not to acknowledge!

I like to use something called Capital One Enhanced Transactions, which helps me track my how much I am REALLY spending and when.

What are some valuable lessons you've learned from starting your own business?

It took me a few years to really understand the cycles of technology. It’s pretty much always busy, but sometimes like during Q4, it can be especially crazy – I know I cannot book any downtime during this time. It’s the opposite with summer months. Things slow down a bit but pick up every year after Labor Day signified by iPhone’s new launch. It’s important for me to get family time but also know in advance when is best to schedule so I can truly have off and not have to work through breaks.

What are some of your top tips on building one’s personal brand?

Stay true to you. I will never do anything I am not comfortable with or that doesn’t sit right with me. In the early stages of building your brand you will be challenged – people have opinions and you don’t want to come off like a diva. However, it is always the right answer to stay true to you.


Save For A Downpayment Or Invest?

The Stupid Things People Do To Save Money

The Benefits Of Debit Cards Over Credit Cards

Don't Let A Credit Card Reward Program Alter Your Spending Habits

Readers, what is the current rate on your money market account? Have you been so focused on saving cash that you forgot to optimize your cash returns like me? What are ways in which you optimize the return on your savings?

Optimize Your Returns With Real Estate

Stocks are very volatile compared to real estate. Therefore, if you want to dampen volatility and build wealth at the same time, invest in real estate. Real estate is my favorite asset class to build wealth.

The combination of rising rents and rising capital values is a very powerful wealth-builder. By the time I was 30, I had bought two properties in San Francisco and one property in Lake Tahoe. These properties now generate a significant amount of mostly passive income.

Take a look at my two favorite real estate crowdfunding platforms. Both are free to sign up and explore. 

Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. For most people, investing in a diversified eREIT is the easiest way to gain real estate exposure. 

CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. If you have a lot more capital, you can build you own diversified real estate portfolio. 

Recommendation To Build Wealth

 In order to optimize your finances, you've first got to track your finances. I recommend signing up for Personal Capital's free financial tools so you can track your net worth, analyze your investment portfolios for excessive fees, and run your financials through their fantastic Retirement Planning Calculator.

Those who are on top of their finances build much greater wealth longer term than those who don't. I've used Personal Capital since 2012. It's the best free financial app out there to manage your money. Always optimize the return on all your investments. This includes all your passive income investments.

Personal Capital Retirement Planner - Don't Forget To Optimize The Return On Your Savings
Is your retirement plan on track? Run your numbers for free to see how you stack up.

Optimize The Returns On Your Savings is a FS original post.

29 thoughts on “Don’t Forget To Optimize The Return On Your Savings”

  1. I’m a bit surprised that no one has mentioned the money market reform. Check to see that your type of money market won’t charge you extra fees or suspend your withdrawals.

    I vote for Discover and Ally bank too. I use them for savings and CDs. I’ve set up a nice 12 and 24 month CD ladder, with 24 CDS, where a small chunk of money renews/becomes available every month. That way I can take advantage of rising rates. And I have the option(which I’ve rarely used) to take my money out for whatever reason.

  2. I’ve loved my CapitalOne360 account. It’s gone through a couple names since I started using it. I really appreciate that they have a decent APR and allow sub-accounts that are easy to switch between. It helps me to see what each bit of cash is there for. I’ll be interested to see more of their millennial outreach in the next few months.

  3. I will no longer subscribe to your blog articles, due to censoring out my messages.
    Seems that you are like all the other bloggers, chasing ad income, that’s all.

    Big disappointment. Please remove my e-mail from all of your mailing lists (aka “money generating machines).

    Good bye.

  4. OlderAndWiser

    P.S. – Katie, you may want to check and see if your library offers Zinio – digital magazines for free!

  5. OlderAndWiser

    Shopping around for the best rates for cash savings is definitely a passive income booster. You can get a bit higher than 1% at some online banks (for example, 1.05% at GSBank, Goldman Sachs Bank). The Deposit Accounts web site is my favorite for rate shopping.

    I will also make the case for keeping some savings at a local brick & mortar bank. While you may not get quite as high as at an online bank, you can sometimes come close. But you will probably have to ask for the higher rate, they won’t just give it to you. My local bank is currently giving me 0.9% following a “discussion” I had with one of the bankers. (Okay, okay – I complained. It wasn’t the first time and it won’t be the last.) While that 0.9% rate is slightly lower than what I could get online, I also get free checks, free cashier’s checks, Medallion signature guarantees, and a discount on my safe deposit box. I also can easily withdraw cash when I need to. Even in this day and age, I do use cash sometimes. There are 2 local non-profits where I sometimes shop and I like to pay them with cash so that they don’t have to pay processing fees. I also need cash for the occasional office gift pool. And I like to keep cash on hand to use following a natural disaster. All of those things have value to me and make it worth the slight sacrifice in rate.

    1. Your bank’s branch staff has control/influence over interest rates? Did you travel back in time to the 90’s or something? That’s amazing, and unheard of today. Especially in the big banks.

      ARB–Angry Retail Banker

  6. Take a look at tax-exempt VRDOs. You can get buy daily or weeklies at ~.90% fed tax free. They contain hard puts back to a high quality credit. Only problem is that minimum is 100k. These are the securities that money funds purchase then add fees.

  7. Finance Solver

    YES! I used to bank with Chase (where they paid a pitiful 0.01% APY for my savings) but now made the switch to Discover where they generously pay 0.95% where my interest income moved from like a dollar a year to $200 last year. I didn’t know Capital One’s savings account paid 1.00%, I might look into it to park my cash reserve. They had a promo going on earlier this year where they basically paid people a lot of money to bank with them that I missed out on. Eh, what can I do? Great interview Sam!

  8. Another Reader

    I use Ally, Synchrony and Barclays. I don’t care for Capital One or its’ predecessor, ING. The other websites are much easier to use and the interest rates are equal or better. Synchrony and Sallie Mae both offer 1 year CD’s at 1.25 percent.

  9. I did an article some time ago on this topic, and I’m really glad to see it covered here. Leaving your money in a brick and mortar bank is not the way to go. Ally, Capital One 360, CIT, and many other online banks offer a much better alternative to park your savings.

    Keeping emergency savings accounts (be it savings, money markets, or even short term (90 day max) CD’s) in these online banks is an absolute must. Higher interest rates, liquidity, and a place where you won’t be tempted to withdraw the money on the spot for frivolous purchases? It’s like the online banks were made specifically for emergency savings accounts!

    ARB–Angry Retail Banker

  10. I use Ally, Amex, and Barclays, in case you need to stuff more cash! Another thing I do is often do a 50/50 cash/NY Muni Vanguard fund, as Munis are basically backed by the US govt and offer significant tax benefits.

    What neighborhood do you think Uber and Airbnb employees would buy? Also, what price range do you think this will be in? Would you consider partnering with someone to buy properties in a better price range and create an LLC syndicate? That way we could buy 3-4 properties in an LLC, hire a mgmt company at 8-10% gross rents and decrease risk of vacancy volatility.

  11. David Von Ahnen

    +1 for Synchrony Bank Savings with 1.05% interest, no minimum. I’ve found this to be competitive with most current CD’s of less than 24 months. I have not found money market rates that even come close. I’ll continue to also keep tabs on Ally, AmEx and CapOne rates for my short term savings account needs.

  12. +1 for Ally Bank. It’s nice having 1% on my cash without the restrictions of a longer term CD.

    Nothing against Capital One. I just had a bad experience with one of their credit cards once and am show to forgive and forget at times.

  13. Great information here.

    “My plan is to keep $200,000 – $250,000 in savings through the end of 2018 in order to potentially buy a higher end home that has declined by 10% in value or take advantage of other investment opportunities.”

    Yes, I’m pretty much doing the same thing. Keeping cash on hand to take advantage of a downturn in the real estate market in the next 2-5 years. I currently use money market accounts for cash, but am open to alternatives.

    OT: Have you heard of HomeUnion? It’s a real estate investment company that will select, acquire, and manage investment properties for you. Interested in seeing if anyone’s used them before.

  14. PatientWealthBuilder

    I don’t even try to get a return on my cash. My brokerage account automatically sweeps my cash into a money market. I’m surprised at how infrequently I see people talking about their brokerage account. (But admittedly, I have a lot less cash on hand than you do Sam! :) )

    Keeping cash on hand in order to take advantage of opportunities is the hallmark of wise investing. This allows you to get huge discounts on purchases of investments. There are often opportunities to get great deals in real estate or in the stock market (as you mention Sam) if you are patient and wisely hold some cash ready to deploy. I actually think that being patient with deploying one’s cash can result in much higher returns even if you lose a ton of interest while waiting. Warren Buffet does this. Keep your powder dry! Buying the dips of the stock market is a great idea. Interesting Post.

  15. I use capital one 360 for my cash reserves on my rental properties. It is a great place to store money I will hopefully not be touching.

    A side benefit is I don’t even see it in my regular checkings / savings so I am in no way tempted to raid my cash reserves fund.

  16. This is a great reminder to do a financial checkup atleast once a year. Whether it’s your savings rate, insurance, or even paying too much for cable tv it makes sense to see if you are currently optimizing everything in your financial life.

  17. Capital One’s online savings account has an interest rate close to 1%. And there are other companies that are higher than 1%. Any advantage to putting cash in a money market with a lower interest rate than an online savings account?

    1. I think there’s only going to be about 35 people in the audience to make it a more intimate setting. But it will be broadcast live here: . I’m just an audience member, but may be doing some Q&A. Here are the details:

      Reimagining Finances: Financial Realities That Inspire New Ideas, Innovation and Education

      Millennials are the first generation to have grown up with technology fully integrated into their lives, being immersed in social media and calling the “second screen” their best friend. They are also a generation that entered the workforce during one of the most pronounced downturns since the Great Depression. Financial illiteracy and worry are detrimental, underscored by PwC’s recent 2016 Employee Financial Wellness Survey demonstrating Millennials are the group most troubled by financial stress.

      In the past decade, members of this unique, aspiring generation have made great strides to combat the recession. Strides that include; innovation in technology, new ideas and startups to make common luxuries affordable for all to enjoy, as well as development of new programs that are digestible to a mobile generation. Many would challenge that millennials are actually helping make financial literacy more straightforward, transparent, and thus helping improve the overall quality of life.

      Capital One invites you to join us on Thursday, October 13th to look beyond the natural confines of “finances” and explore all the ways that visionaries are reimagining the role that technology and money play in our day-to-day lives.

      The event will be live streamed via ForaTV. Q&A will be hosted via the chat functionality on ForaTV beginning at 10am PST. Participants are encouraged to submit inquiries. Registration to ForaTV will be required to submit a question.

       Mario Armstrong: Mario Armstrong is an Emmy award-winning television talk show host and
      the Digital Lifestyle Expert® on NBC’s TODAY Show. He is the founder of the #NeverSettleClub, a community that works together—online and off—to help members pursue their passions and fulfill their dreams. He is currently preparing for the launch of his Never Settle Show and NeverSettle.TV – a live, real-time, social media-driven TV talk show.

      1. Jake Fuentes, Co-Founder and CEO of Level Money
      Jake Fuentes is Co-Founder and CEO of Level Money, now part of the Capital One family of companies. The award-winning Level Money application simplifies money management for young adults, and has helped hundreds of thousands of consumers manage more than $12 billion in transactions. Prior to Level, Jake served as Chief of Staff for Emerging Products for Visa, managing international product development. While there, Jake’s teams developed the underlying payments technologies behind Square Cash and Apple Pay and created Visa’s first external developer platform.

      2. Stefanie O’Connell, Author of The Broke and Beautiful Life
      Stefanie O’Connell is a financial expert, Gen Y advocate, speaker and author of the book, “The Broke and Beautiful Life.” Dedicated to helping young adults achieve financial greatness, Stefanie has been nicknamed the Mindy Kaling of personal finance by The Greenwich Time. Her work has been featured in The Wall Street Journal, Forbes, SUCCESS magazine,, The Dr. Oz Show, Fox News and ABC World News. She also works with universities, leading financial institutions and Fortune 500 companies, sharing her fresh and timely advice with their audiences.

      3. Erin Lowry, Broke Millennial, CBS This Morning Contributor, Forbes contributor
      Erin started Broke Millennial® to increase financial literacy — mostly through telling funny financial tales from her own life and sneaking in an actual money lesson. After ditching the parental welfare program post-college, She began a journey to survive the financial burden of living in New York City and simultaneously develop a respectable net worth.

  18. Optimizing your cash portfolio is such an easy way to increase your return. Alot of the online banks like cap one 360 even give away free cash as a sign up bonus making it a no trainer to look around. Cap one predecessor in direct even had a black Friday savings event with larger cash back. Be sure to explore options.

  19. Synchrony Bank has been paying 1% on their high yield savings for at least a year and doesn’t have a minimum balance. It is pretty much an on line bank (I think they have 2 brick and mortar branches) but on line works for me.

  20. It is amazing the discrepancy in savings rate. I personally use CapitalOne and Ally Bank. Navy Federal also has good CD rates. As a real estate investor I generate lots of excess monthly cash that can’t necessarily be quickly reinvested in another house. Like Sam, finding a good place to temporarily invest cash becomes important.

  21. Great charts. It’s nuts how much rates have changed over time. It’s hard to believe countries like Japan still have negative rates.

    I’ve always been impressed with how much higher the interest rates are with online banks like Capital One. I’ve been whittling through my cash this year getting it invested in the market but since I don’t plan on going down to zero cash I could benefit from opening a mma account with a better rate. I think the one I have now is like a ridiculous 0.1 percent or something.

    1. PatientWealthBuilder

      Have you all considered private funding? If you know and trust a real-estate investor, you could lend them money for one of their investment properties and make over 5% interest. I’m so surprised that I haven’t seen more of this happening. I am biased I guess because I’m currently looking for such an investor on the east coast but it is something to think about!

      1. 5%? The crowdfunding real estate sites are all offering 10-12% and have already gone through one screen of due diligence.

        1. PatientWealthBuilder

          10-12% is “over 5%” for one, for another you can reduce your risk dramatically by working with a person you trust. Private money allows you to customize the agreement as well. The interest, term, payment structure, points, fees, and everything else are negotiable. There are pros and cons for both arrangements but having a custom agreement with someone you trust can be a very powerful tool.

          What crowdfunding websites are you referring to? Thanks Mercury.

          1. Really disagree! 5% is a horrible return for almost any real estate project with an intermediary. 10-11% is fairly standard for real estate loans for flips. If you invest in a syndicate in commercial real estate, you are really looking to get 12-20% IRRs and 8-15% cash-on-cash. Risk can be defined many ways and although knowing someone is one way to mitigate one risk (agent risk), there are plenty of other risks as well. Not to mention, these sites do thorough vetting and you are able to do due diligence much easier. I do agree that being able to customize agreements is great, which is why private deals are excellent, but 5% is not worth it.

            Here is a good crowdfunding site for real estate, as it compiles several sites together:

            I would google this (crowdfunded real estate) because there are about 30-40 sites at this point. Here are a few examples though to get you started:

            Patch of Land

            Real Crowd

            Realty Mogul

            Realty Shares

            Don’t get me wrong, I am invested in multiple syndicates, but none of them are paying anywhere close to 5% (all much more, because if there is a supply/demand issue downstream, the yields can drop quickly). For 5% pre-tax, you can basically invest in a muni. There is much more risk in any individual real estate project, you have to be rewarded for that.

      2. PatientWealthBuilder

        private funding offers greater customization and can result in less risk if you know the person and depending on how you structure it.

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