Saving money is essential to financial health, but simply stashing wads of cash under your mattress or investing in certificates of deposit won’t do.
For your savings goals to be realized, you need an account with a competitive interest rate and low transaction or monthly fees or fees. To find your ideal savings account, do some shopping around.
Keep your money safe.
Due to recent bank collapses and financial turmoil, keeping money safe has become top of mind for many people. Most find it easy to store their savings in bank or credit union savings accounts that are federally insured by the FDIC up to $250,000 per depositor as well as possible additional coverage through NCUA (National Credit Union Administration).
Checking accounts are ideal for everyday spending with checks, e-transfers and debit cards; while saving accounts provide higher interest rates and more flexibility. They’re great for short-term financial goals like saving for an emergency fund and building your wealth.
Savings accounts provide more liquid savings solutions than certificates of deposit (CDs), which require you to commit funds over an agreed-upon term and often come with penalties if withdrawn early. Furthermore, multiple banks or credit unions allow users to open multiple savings accounts at their location.
Though not all banks provide equal savings rates, online banks typically have some of the highest due to reduced overhead costs.
You can easily check current savings rates offered by various institutions by visiting their websites or calling them; you could even use Savings Rate Watcher to see how rates change throughout the year.
Grow your money.
Savings should be used to build wealth for when it is most needed, which is why having a dedicated savings account with interest-bearing capabilities is so essential.
Furthermore, an emergency fund consisting of six months worth of living expenses must be created, otherwise debt or retirement savings could incur taxes and penalties that are too steep to bear.
Chequing accounts, designed for everyday spending without earning interest, offer a safe place for you to store and grow your money.
Savings accounts can be opened with any bank, credit union or financial institution and easily accessible through internet banking, ATMs, direct deposits, phone banking or branch visits – they may also be FDIC-insured and used for short-term financial goals such as an emergency fund or down payment savings goal.
For maximum savings potential, it is wise to find an account that offers a competitive interest rate. Research rates offered by various banks and online institutions before making your choice; credit unions often provide higher yields than traditional banks. It also pays to shop around for fees as some may be unavoidable but excessive payments could sap away at your income from interest earnings.
Access your money when you need it.
At the climactic moment of many superhero films, there’s usually an epic showdown when their plan fails and they need to come up with an alternative solution. A savings account provides just such an emergency backup plan.
Savings accounts provide convenient access to cash when needed while still earning interest. They’re perfect for emergency funds and short-term goals like travel and home repairs; more frequently withdrawable options such as money market or high yield savings may require minimum balance requirements or service fees, so be mindful when opening these types of accounts.
Be mindful when selecting an account to open. Most savings accounts don’t report to credit bureaus; however, certain may conduct a ChexSystems inquiry in order to verify your identity and banking history.
Be mindful that withdrawals may be restricted each month by federal regulations or your financial institution; this will help avoid incurring withdrawal fees while keeping you focused on reaching your savings goals.
Plan for the future.
Saving money is crucial to meeting financial goals and protecting against unexpected expenses in the future. Finding that best meets your needs, money market savings account or online savings account – will protect and grow its value over time. There are various savings accounts to choose from: traditional, money market and online savings. Each option provides its own set of advantages so find one that best meets your requirements and needs.
Establishing measurable targets alongside your plans can help ensure you remain on course to meet them, hold yourself accountable and avoid spending money on things which don’t reflect your priorities.
Savings accounts provide a convenient place to put the funds you’re setting aside for specific goals, like an emergency fund or down payment on a home.
They’re also great ways to set aside money for short-term goals; for instance, if you want high-quality headphones soon, set a goal of saving $200 over six months by creating an account specifically dedicated for these purchases.
Keep tabs on your savings account with monthly or quarterly statements that provide details on deposits, fees, interest earned and balance. These statements may be delivered electronically or by mail – be sure to review them regularly to track how your money grows over time.