INCOME SERIES #3: Ways to Earn and Maximize Interest Income

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Interest income is revenue earned by a lender for the use of his funds over a period of time. As individual consumers who deposit our funds into bank accounts, we are savers and providers of funds to the banks. We are therefore lenders and are entitled to receive interest income.

Are you exploiting the various opportunities available for you to receive interest income? Maybe you are holding your money for ease of access when you need it, or maybe you are not aware of the many opportunities or financial products that pay interest income or how to go about exploiting them. [bctt tweet=”Remember, interest income is not received on any money stashed under the bed or in the closet.” username=”wealthygen”]

The best ways to earn and maximize interest income discussed in this lesson include:

• Savings accounts
  • Online savings accounts
• Interest-bearing checking accounts
  • Higher interest on checking accounts
• Money market
  • T-Bills
  • CD’s
• Capital market
  • Bonds
• Compounding interest

Note that the interest income is passive, meaning that it does not require you to invest your time in any way. Unlike the earned income, which requires your time, or the profit income, which requires that the business makes profit, the interest income only requires you to invest your money for a specified length of time.

To grow your money, interest rate is one number you must watch. Compounding interest can potentially grow your interest income over time.