So you are looking to save money and earn interest. With inflation eating into cash balances and bank rates fluctuating from month to month, many people are asking the same simple but important question: Where can I put my money so it grows — without taking on too much risk?
The truth is, there’s no one-size-fits-all answer. In 2025, interest-paying assets come in many shapes and sizes. Some are boring and predictable. Others offer higher rewards, but also higher risk. Depending on your goals, timeline, and how actively you want to manage your finances, the “best” place will likely be a mix of strategies.
Here’s a breakdown of the most common places to earn interest, generate passive income, and grow your savings — including some that go beyond what your bank would tell you about.
1. Traditional bank savings: safe but limited
If your goal is simple preservation of cash with zero risk, high-yield savings accounts are the obvious starting point. In Europe, these accounts may offer 2–3% annual interest, depending on the bank and country. In the U.S., savings rates are hovering around 4–5% at some online banks. In Japan, however, rates remain close to 0%.
The upside is that these accounts are easy to access, government-insured (up to €100,000 or $250,000 depending on the country), and require no learning curve. But once you factor in inflation, real returns often turn negative.
Best for: short-term cash reserves, emergency funds.
Drawback: interest barely keeps up with inflation.
2. Government and corporate bonds: stable income with varied returns
Bonds are essentially loans to governments or companies. In return, they pay you interest — called a coupon — usually every 6 or 12 months. In 2025, European government bonds like the German 10-year Bund offer around 2.3%, while U.S. Treasuries of similar maturity yield closer to 4.3%. Corporate bonds can pay more, depending on the risk profile of the issuer.
Bonds can be bought individually or via bond ETFs, making them accessible even to those without large amounts to invest.
Best for: medium-term income seekers who prefer low volatility.
Drawback: bond prices fall when interest rates rise; not immune to inflation.
3. Dividend-paying stocks: income and upside
Some of the world’s biggest and most stable companies return a portion of their profits to shareholders via dividends. Companies like Nestlé, Unilever, or Allianz are known for steady payouts, typically ranging from 2–5% annually. U.S. “dividend aristocrats” like Coca-Cola or Johnson & Johnson have also raised dividends year after year.
These stocks not only pay you to hold them, but may also grow in value over time. However, stock markets fluctuate — and dividends can be cut.
Best for: investors seeking long-term capital growth with some income.
Drawback: subject to market volatility and tax on dividends.
4. Real estate income: rental yields and long-term appreciation
Property has long been viewed as a reliable way to preserve and grow wealth. Whether you own a rental apartment or invest via REITs (Real Estate Investment Trusts), real estate can generate steady monthly income while appreciating in value over time.
Gross yields vary significantly by region — for example:
- Lisbon, Portugal: ~5.5%
- Tallinn, Estonia: ~6–7%
- Berlin, Germany: ~3.5–4%
REITs allow you to invest with as little as a few hundred euros, and are traded like stocks.
Best for: income-focused investors willing to commit medium to long-term.
Drawback: property is illiquid, and REITs are sensitive to interest rates.
5. Crypto interest accounts and staking: high risk, high reward
In the digital asset world, some protocols and platforms offer interest on crypto holdings. Stablecoins like USDC or DAI can yield 3–7% via decentralised lending platforms, while staking ETH or SOL may bring in 4–6%.
However, the risks are not small. Smart contract bugs, platform hacks, regulatory crackdowns, or de-pegging events can quickly erode capital.
Regulated platforms have emerged to reduce some of these risks, but crypto yield still requires careful due diligence.
Best for: advanced investors with high risk tolerance.
Drawback: volatility, complexity, and lack of deposit guarantees.
6. Structured yield strategies: covered calls and enhanced income
If you’re comfortable with public markets and want to boost returns from a portfolio, structured income strategies like covered calls can offer enhanced yield. ETFs such as JEPI, QYLD, or XYLD employ option-based strategies to generate income from stock positions.
While these funds do limit upside growth, they provide consistent monthly income that can exceed 7–9% annually in some cases.
Best for: income-focused investors seeking more than bonds offer.
Drawback: capped returns and exposure to equity market risk.
Holding investments through a company: tax-efficiency and control
One often-overlooked option — especially in Europe — is holding investment assets through a legal entity. This is especially relevant for:
- Active investors earning significant interest or dividends
- Freelancers or entrepreneurs with retained profits
- International residents seeking cross-border efficiency
By routing investments through a legal structure like an Estonian OÜ, investors can defer taxation on profits, reinvest earnings tax-free, and access more professional-grade broker tools (like corporate margin accounts). For example, a German trader living abroad may benefit from separating personal income and investment activity to simplify reporting and improve control.
This is where Investor 2.0 comes in. It offers a lean Investment Purpose Vehicle (IPV) specifically built for this purpose. It allows users to:
- Set up a compliant EU investment entity from anywhere
- Hold assets like dividend stocks, REITs, crypto yield positions, or bonds
- Automate tax reporting and asset tracking
- Minimise admin cost (from ~€540/year all included) compared to traditional corporate setups
Investor 2.0 is particularly useful for those who’ve grown beyond simple savings accounts and want to run a low-friction, tax-aware investment structure without hiring multiple service providers.
The best place to earn interest depends on your goals — but options exist
There’s no universal “best” place to earn interest in 2025. For some, it’s a simple high-yield savings account with no fuss. For others, it might mean dividend ETFs, crypto staking, or structured income strategies through a company.
Many smart investors combine different layers:
- Cash: for safety and liquidity
- Bonds: for predictable interest
- Dividends and REITs: for income and growth
- Legal structures like IPVs: for tax optimisation and flexibility
If your capital is starting to work harder for you, and you’re ready to explore smarter ways to manage it—Investor 2.0 might be the right next step. With a fully digital investment entity, automated reporting, and tools tailored to passive income portfolios, you can stay focused on growing your wealth—not managing paperwork.
