How to Make Your Savings Work For You

(BPT) - A generation ago, Americans were savers. When the Greatest Generation and Boomers needed to make a major purchase or wanted to take a trip, they put money aside. And then they saved some more. Putting money aside each week or month was an ingrained habit, perhaps as an outgrowth of people living through the Depression and World War II.

But today, half of Americans do not automatically put money into their savings accounts with each paycheck. This is a routine that creates incremental gains every few weeks.

According to a recent PurePoint Financial survey almost half of Americans today don't quite get the concept of saving for the short term. People are putting money into their employer-matched 401(k) plans for retirement, but they're not setting savings goals for the next one to five years.

That's a mistake, says Pierre P. Habis, president of PurePoint.

"People don't realize that not saving actually costs them money," Habis says. "They're leaving money on the table by not doing one simple thing: Maximizing their money by moving it from a checking account or traditional savings account to a high-yield savings account."

Somehow Americans' money mindset shifted, and the instant gratification that comes with purchasing what we want, when we want it, has erased the concept of saving for a purchase.

Millennials in particular are frequently derailed from their short-term savings goals by impulse. The PurePoint survey found that compared to the Boomer generation, millennials are three times more likely to have their short-term savings derailed by an impulse trip or vacation because their friends were going; and equally three times more likely to buy something on impulse because of an online or social media ad.

Other findings include:

* 65 percent of Americans do not know they're missing out on free money by not having a savings account, and don't understand how interest rates can impact their savings.

* 4 in 10 Americans believe their checking account and savings account have the same interest rates.

* One-third of Americans prefer debt and instant gratification purchases to saving.

* More than half of Americans let money sit in a checking account without transferring it to a savings account, where they can be earning interest.

How much money are people losing by not earning interest in a high-yield savings account? The numbers are startling.

According to some number-crunching by NerdWallet by CNBC, if you put $10,000 in your checking account, at the end of three years, you'll have that same $10,000. A traditional, low-yield savings account will give you about three extra dollars. But a high-yield savings account will give you $10,475. Now you're talking about some real money, and it only goes up from there. Leave that $10,000 in the account for five years, and you'll have $10,805. And that's at an interest rate of 1.55 percent. Non-traditional banks like PurePoint offer higher yields, reaching more than 2 percent. That's a good chunk of change.

"A good first step is to check your APY, which according to our research more than half of Americans don't know," Habis says. "If you're not earning at least one percent, you're doing yourself a disservice."

Put that money in a CD, and you'll earn even more. Now, your money is working for you, not against you, like debt, inflation and credit card interest rates.

The solution? The old-fashioned notion of saving for a rainy day has been streamlined by ultra-modern financial technology. Online financial institutions like PurePoint, which is a hybrid digital bank with brick-and-mortar financial centers, are offering more competitive interest rates for high-yield savings and CD accounts than traditional banks, nearing the 2 percent mark. It's an alternative to investing that you can trust with a knowable, controlled return over the short or long-term. It's almost like investing in the stock market, but with a controlled and knowable return.

For more information about how you can make your money work for you, visit PurePoint at and try their rate comparison tool.

Personal Finance: "How to Make Your Savings Work For You"