It’s already almost 2025. Make this the year that you make the most of your savings. No one knows exactly how interest rates will change, or how fast inflation will go up, so you’re going to want to be strategic about where you put your hard-earned cash. Here are some smart moves you can make in the new year.
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Automate Your Savings
Set up a “pay yourself first” system if you haven’t already. A portion of each paycheck should automatically go to your savings accounts. This way you don’t even have to get into the habit of contributing to your savings. You don’t have to think about it, and you won’t be tempted to spend money that will be better used earning interest.
Maximize Retirement Contributions
You should always be maxing out to retirement accounts like 401(k)s and IRAs. You’ll get the most benefit out of compounding interest and the tax advantages when you hit retirement age.
In 2025, the contribution limit for 401(k) plans has gone up to $23,500. So you’ll be able to invest even more. And if your employer matches contributions, even better. You’ll want to take full advantage of any “free money” they offer.
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Prepay Your Mortgage or Other Loans
It’s always a great idea to get rid of any debt you have as fast as you can. If you’re able, make bigger payments than you need to on your mortgage, car loan or student loans. You could save thousands in interest and get debt-free faster.
Put Your Cash in High-Yield Accounts
Shop around for good a high-yield savings account or money market. There are a lot of banks and credit unions out there that are online only, and they can offer higher interest rates than most brick-and-mortar banks.
Every bank is different, and they all offer different perks and rates. Some give you better rates for larger deposits. Others have great sign-up bonuses. So don’t put all your savings in one place. Open two to three accounts at different online banks. Then keep track of the different interest rates as they change, and move your money between them as needed so you’re always getting the best deal.
Buy I Bonds for Protection From Inflation
I Bonds are a kind of savings bond issued by the federal government. The interest rate changes every six months to match inflation. This makes them perfect for protecting your savings from losing value. You don’t need to watch the markets or make any decisions once you buy them. Just let them do their thing. The only catch is you need to hold them for at least one year, and if you cash out before five years you’ll forfeit three months of interest. You can buy them through TreasuryDirect.gov.
Mix In Some CD Ladders
Another way to earn higher yields on your savings in 2025 is by putting some of your money into CDs (certificates of deposit). When you put your money into a CD, it earns interest over the course of a set period, usually ranging from three months all the way up to five years — the catch being that you can’t withdraw your money until the CD matures.
A CD ladder is a strategy that gives you some access to your money over time. Here’s how it works: You split your savings into equal portions. Then you put each portion into CDs with different maturity dates. When each CD matures you can either reinvest it or use the money, this way some of your money is always earning interest.
Different banks offer very different CD rates, so be sure to shop around.
Get Into Real Estate
If you have more tolerance for risk in 2025, you might want to think about getting into real estate. But you don’t have to deal with all the hassles of property ownership yourself. Instead, you can invest in either a real estate investment trust (REIT) or a real estate crowdfunding platform.
Both options are an easy way to get exposure to the real estate market. REITs are publicly traded companies that own and operate rental properties. You earn a portion of all the rental income the company collects, based on the number of REIT shares you own. Crowdfunding lets you go in on specific properties with other investors. You earn your share of the income when the property gets sold.
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This article originally appeared on GOBankingRates.com: 7 Things To Do With Your Savings in 2025 To Grow Your Wealth
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