Separate the $500 into three categories:
1) Money you're saving specifically for emergencies.
2) money you're saving to buy something specific within the next five years (car, vacation, Christmas presents, etc)
3) money you're saving for the long term (won't be spending for at least five years)
For the first two categories, leave it in the bank, and just accept the fact that they aren't pay interest right now.
The third category is the money to put in the stock market (or pay off debts with if you have any).
If you put $500 a month in a savings account that's paying 1% interest, at the end of the year, you'll have put in $6,000 and have received about $30 in interest over the course of the year.
$2.50 a month. skip one trip to Starbucks and dont worry about the 1% interest. Works out just the same.
In the US, banks are paying about 1/2 of one percentage point in interest annually. You might be able to sniff out one paying a bit more, but not enough to make a difference. Expect it to notch up a bit when the Fed increases the overnight rate, but don't expect the days of 4% savings accounts to come back anytime soon.
Bank interest rates right now are very low everywhere, although some are worse than others. If you have a basic emerrgency fund, you might consider other investment options.
Try http://www.bankrate.com and you may find
a bank that meets your needs. Ally is one of the best.
Since most all banks are paying very low interest rates
you may want to look into a low risk mutual fund.
Look into online savings accounts or investing in stocks.
