5 Ways to Earn at Least 5% APY on Your Money (Without Using the Stock Market)

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You want to grow your money. One of the best ways to do this is parking it in an investment vehicle that can earn you passive returns — but you don’t want to take the stock market route.

Maybe you’re leery of potential downturns that could cause you to lose some of your initial investment, or perhaps you just want to keep your money close. Whatever your reasons are, you’ll be happy to know there are plenty of safe options to choose from.

1. Certificates of Deposit

Otherwise known as a CD, a certificate of deposit is a type of savings account offered by banks and credit unions that requires you to keep your money in the account for a certain period of time. Early withdrawal may require you to pay a penalty, but you have plenty of terms to choose from.

For example, some of the more popular terms include six months, 12 months, two years and five years. CDs have locked-in rates, so you’ll know exactly how much interest your money will earn, and it’s not unusual to find CDs offering at least 5% APY.

Generally speaking, credit unions tend to offer higher rates. Longer investment terms also tend to have higher interest rates, but this isn’t always the case. Before opening an account, you’ll want to shop around to make sure you’re getting the best option for your needs.

2. Annuities

Essentially a contract between you and an insurance company, an annuity promises the buyer a future payout in regular installments, usually monthly and often for life. The main types of annuities are fixed, variable, immediate and deferred.

One option you might consider is the Gainbridge FastBreak™ annuity. You’ll earn an up to APY* on this annuity, which comes with a self-managed platform and the ability to withdraw your money without a tax penalty before age 59 1/2. Issued by an insurance company, this annuity comes in three to 10 year terms, in amounts of $1,000 to $1 million. You’re able to withdraw up to 10% of the account value each year.

The FastBreak annuity is self-directed, easy to set up and comes with 30 days to cancel your contract if you change your mind. Get started here to start earning up to APY*.

3. Money Market Accounts

Money market accounts are a type of account offered by banks and credit unions that tend to pay higher interest rates than other types of savings accounts. We’ve seen offers as high as 5.30% APY. 

However, you’re generally limited in the number of transactions you’re permitted to make using a check, debit card or electronic transfer per month or quarter. Withdrawals made in person, by mail, telephone or using an ATM are usually unlimited.

Depending on the bank or credit union you choose, you might be required to make a minimum deposit — ranging from a few hundred dollars to several thousand. In many cases, the higher your minimum balance, the higher the interest rate you’ll receive.

This type of account is sort of a hybrid of a savings account and a CD. You’ll have constant access to your money, but the time restrictions placed on withdrawals allow you to earn higher interest rates.

4. Bonds

Conversationally, stocks and bonds are often mentioned together, but they’re actually very different. Instead of receiving ownership rights, bonds serve as a loan from you to the issuer.

Bonds can be issued by companies, governments and municipalities. The money can be used for a variety of purposes, including providing operating cash flow, paying debt and financing capital investments in schools, highways, hospitals and other projects.

As an investor, bonds can be a great choice for your money, because they offer a predictable income stream. Interest is usually paid on a regular schedule. Plus, if the bond is held to maturity, you’ll get your entire principal back.

The APY on bonds varies greatly by type. There are multiple options available with an APY over 5%, so shop around to ensure you’re getting the best possible rate.

5. High-Yield Savings Accounts

Notably more lucrative than their traditional counterparts, a high-yield savings account can pay up to 10 to 12 times the national average of a typical savings account. Online banks often offer the best rates, so this can be a good choice if you’re OK with not visiting a traditional branch location. No two institutions have the same account requirements, but this may involve rules surrounding the initial deposit, minimum balance and fees.

If you’re able to comply with the restrictions, you can be handsomely rewarded with much higher than average interest rates. For reference, as of December 2023, the national average yield for savings accounts is just 0.46%.

Bottom Line

As you can see, there are several different ways to earn at least 5% APY on your money without using the stock market. Each option is attached to its own unique terms and conditions, so take the time to decide which is right for you.

When you settle on a product, always shop around before committing. Different financial institutions offer different versions of the same product, so doing your homework is always advised.

*Annuity rates are subject to change at any time, and the rate mentioned may no longer be current. Please visit Gainbridge.io for current rates, full product disclosures and disclaimer. Withdrawals above the 10% free withdrawal amount subject to a withdrawal charge and market-value adjustment. FastBreak™ is issued by Gainbridge Life Insurance Company in Zionsville, Indiana. FastBreak™ is not a tax-deferred annuity; instead, it is taxed annually.

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