Personal Finance

It Doesn't Take A Fortune To Have Your Money Work For You, See How

Marc Guberti

Published: February 19, 2025 6:56 am

Having more money allows you to generate higher returns. Essentially, the more you make and save, the more your money works for you. However, you don’t need a fortune to start realizing the benefits of compounded growth. Even a single dollar can grow over time, but you don’t need millions of dollars to make investing work for you.

Starting with $10,000 and making regular monthly contributions to a high-yield savings account can result in risk-free returns that compound over time. This guide will reveal the types of returns you can get while comparing them to stocks, crypto, and bonds.

How Much Can You Earn with Investments?

High-yield savings accounts are the least risky asset class, with bonds right behind them. Stocks and crypto are riskier but have the potential to produce higher returns. Using annualized returns over the past five years, we can gauge how much each investment can earn.

Bond returns would look better if you held a bond to its maturity. Those returns would resemble a high-yield savings account, especially if you invest in corporate bonds with higher yields.

The Risks of Buying Stocks and Crypto 

Stocks have steadily outperformed high-yield savings accounts and bonds, while crypto has crushed all three of those asset classes. However, these assets come with more risks that people should consider.

For instance, stocks and crypto can lose significant value. Economic contractions hit these asset classes the hardest, as we saw in 2022. Bitcoin dropped by more than 65% that year as the Federal Reserve hiked interest rates amid soaring inflation. Even the well-diversified S&P 500 didn’t do too well, losing roughly 20% of its value in one year.

Of course, those assets mounted strong comebacks in 2023, but those types of comebacks don’t always happen. Younger investors can wait and be patient, but retirees who are withdrawing from their portfolios don’t have the flexibility to hold all of their shares if the stock market drops by 10%.

It’s even riskier if you decide to buy growth stocks and cryptocurrencies. There’s more to monitor and different things that can go wrong. Investors who buy multiple cryptocurrencies also have to be careful about scams. 

Earn Steady Returns Without Taking Any Risks

A high-yield savings account allows investors to earn guaranteed returns without risking their capital. Banks showcase the interest rates you can earn on your account, and you will continue to collect interest as long as you keep your money in the account.

Banks have variable interest rates, so they can change at any time. However, you don’t have to risk losing capital like you would if you bought stocks and crypto.

High-yield savings accounts are also insured by the FDIC for up to $250,000. That’s an extra perk of storing your money in a bank account. However, you should research banks to see which one offers the best rate. It doesn’t make sense to use a savings account that offers 1.00% APY when you can find an account that offers 2.00% APY.

While it’s better to earn something instead of nothing, those two rates aren’t good enough. If you want the most competitive rate, you may want to open a SoFi Savings account. SoFi offers a 3.80% APY plus other financial products that are designed to save you money. SoFi has higher APYs and fewer fees since it is an online bank. It has less overhead than traditional banks, which allows it to offer better deals for consumers. You can also get a bonus of up to $300 just for opening an account.