Putting money into savings on a regular basis can give you more options financially. You’ll be able to fund goals, and you will have greater peace of mind. However, deciding on the right account for your money save is often a challenge, and the number of options out there can make things even more confusing. The ideal spot depends on the goals you have for those particular savings.
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Options to Choose the Right Account for Your Money
Saving Money
Rising prices have made it challenging for many people to save money because more money goes toward living expenses. Still, it’s a good idea to focus on building an emergency fund and then save for retirement, even if it’s not much each month. One way of reducing your monthly expenses to free up more for your savings accounts is by refinancing your student loans. By refinancing student loans with NaviRefi, it involves getting a new loan to pay off the old one. It can simplify things and potentially reduce how much you pay each month.
High-Yield Checking Accounts
If you have a specific goal, such as a new appliance or a vacation, you may want to go with a high-yield checking account. They give you nearly unlimited access to funds, and you can earn interest along the way. These usually allow you to write checks and use a debit card associated with the account. You are typically not limited to a specific number of transactions during the cycle. Because you will have access to the money, this is a good option for your emergency fund as well, since you won’t need to pay early withdrawal fees on the funds.
Certificates of Deposit
If you have a specific goal in mind, such as buying a home, you may want to go for a certificate of deposit (CD) or a CD ladder. They allow you to take advantage of good rates now, especially as interest rates have risen. They pay you a certain interest rate for a specific length of time, and many credit unions and banks offer them. A CD ladder involves getting CDs with different maturity dates, allowing them to mature on a regular basis. One example is purchasing a CD with a nine-month maturity date, another with a 12-month date, and a third with a 15-month maturity. You will then have savings maturing every three months, which can give you regular access to your money. You can then reinvest the funds, which allows you to take advantage of the higher interest rates. A CD is also one of the known investment types with little risk making it attractive to beginners and experts alike.
Money Market Accounts
You could get a money market account if you want to get a higher yield than a typical checking or savings account would get you. These often come with features like check-writing abilities or debit cards. They have features you may find in both checking and savings accounts, and they tend to earn some interest. Both credit unions and banks tend to offer these, and the best ones will have higher interest rates. Choosing the right type of bank account requires you to compare features between each account you are looking at. The specific features and potential fees vary across institutions.
