Where Will Your Savings Do the Most Good?


Saving money is an ever-elusive goal for many Americans as they try to juggle mortgage and car payments, monthly credit cards bills and other debts. In a time where saving is so challenging, it’s important to make sure that those hard-to-stash dollars are not just sitting idly in an account that isn’t helping them grow. Whether you want to create savings for travel, to cushion your nest egg, or to get out of debt and improve your credit score, you’ve probably wondered what the best method is to grow your savings quickly.

Let’s take a look at some of the options that will help you to make sure that the money you’re saving is doing you the most good and earning the highest rates possible.

  1. Savings accounts

    The average savings account yields just a .06 percent interest rate per year, and in reality, the most you can hope to earn from a savings account is about 1 percent per year. Considering that 57 percent of Americans have less than $1,000 in their savings accounts, earning 1 percent annual interest isn’t going to make anyone wealthy fast. You’d have to get your savings up over the $10,000 mark to begin to see even moderate annual earnings on your money at that rate. Still, savings accounts do offer an FDIC-insured, safe place to put your funds and will ensure that you are getting a steady and predictable rate of growth.

  2. High-yield savings accounts

    These types of accounts can offer higher interest earnings, although they’re not practical for everyone as they require a higher minimum balance. Access to these accounts can also be limited. For example, you may only be able to make a certain amount of withdrawals annually without being penalized.

  3. Money Market Funds

    Money market funds are mutual funds that invest only in low-risk securities, offering a low-risk way to invest and potentially earn a higher return than you can get from a savings account. Investors can typically expect a return similar to short-term interest rates. These funds are not FDIC insured, and are regulated by the Securities and Exchange Commission (SEC). If you choose this option it’s important to do your research and select a fund that has a history of high performance.

  4. Money Market Deposit Accounts

    Money market deposit accounts are offered by banks, and typically require a minimum initial deposit and balance, with a limited number of monthly transactions. These accounts differ from money market funds in that they are FDIC-insured. Penalties may be assessed if the required minimum balance is not maintained, or if the maximum number of monthly transactions is surpassed.

  5. Certificates of Deposit (CDs)

    CDs are offered through most banks and credit unions and are also FDIC-insured. CDs offer a higher interest rate than savings accounts and usually require larger deposit amounts that must be left untouched for a specified amount of time. These time periods can range anywhere from six months to five or more years. Money taken out of the account early will be subject to a penalty fee.

  6. Cryptocurrency

    While Bitcoin had a bit of a rocky year, the predictions for investing in cryptocurrency look good currently. As of April 1, each unit of Bitcoin was selling for $6,816. At the end of April, it was up to about $9,300, marking an increase of 36 percent during the month. Of course, investing in cryptocurrency is much riskier than those savings options that are backed by banks and mutual funds, but for those that have some money to gamble with, here is also a potential for high earning in a short amount of time.

  7. Bonds

    When you purchase a bond you are lending money to an entity to fund a project. In exchange for this loan, bond issuers pay interest for the life of the bond, and returns the face value once the bond matures. Bonds are issued for a specific amount of time at a fixed interest rate. The degree of risk varies and there may be associated penalties for early withdrawal and fees for commissions.

No matter what method of savings you choose, it’s important to research current interest rates and to understand all of the requirements, fees and potential risks before deciding where you will put your savings.

By beginning your savings journey now you will increase your chances of paying off debts, raising your credit score, and improving your overall financial situation. If you are overwhelmed by debt, you might also consider working with a credit repair service to help you. If you’re interested in a free, personalized credit consultation, contact CreditRepair.com today



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