Costs like housing, education, healthcare and childcare continue to rise and salaries are not keeping up as fast. Millennials are struggling now to earn decent wages and debt is increasingly becoming a challenge in our society. Whether you have goals of saving for college, a new house or for starting a family, you will need to start looking for the best ways to store the money you have saved.
Surprisingly, 70% of Americans have less than $1,000 stored away in their savings.* With this in mind, it is important to find the best savings option for you that won’t mean extra fees and might allow you to make a little money on your stowed away cash.
A savings account is a safe place to keep money and earn a little interest on it until you are ready to spend it on a long-term goal. There are different types of savings accounts, but it is important to choose the right one for you. A few things to remember when choosing a savings account: decide how you will use it, decide if you want to use your existing bank, consider interest rates, and read the fine print for fees. If you are having trouble deciding, here are the types of savings accounts to potentially chose from:
Traditional savings accounts
Whatever your financial goals, this savings account is a great place to start. Your money grows safely and earns interest until you need it. You can usually contribute as much money as you would like to it, but it most likely does not come with a debit card or checks. Regulations for this type of account typically only allow for withdraw or transfer of funds six times a month. While traditional savings accounts do generate interest, the rates are usually very low.
Money market accounts
Money market accounts are almost identical to traditional savings accounts. The main difference is with a money market account you can access your cash easier. However, there are limits on how many times a month you can make withdrawals and often a money market account carries a higher minimum balance requirement than a savings account. Money market accounts might have a higher interest rate than a traditional savings account, and they are a good option for emergency savings.
Certificates of deposit
Certificates of deposit (CDs) are also similar to traditional savings accounts. CDs keep your money locked away for a set period. The longer the period and the bigger your deposit, the better your interest rate will be. Although you can withdraw money from a CD early, you may have to pay a penalty.
Special savings accounts
Talk to your bank about other special savings accounts. You may find they have student savings accounts, retirement accounts or holiday accounts, with better interest rates and/or fewer fees.
Each type of savings account can benefit you in different ways. Some earn more interest than others, and some may allow you to access the money more easily. Due to the variety of savings accounts out there, a little research can go a long way in determining which account is best for you. Choose the savings account that is right for your specific situation.
To start researching the best savings account for you, check out the different types of savings accounts First Financial Bank offers.
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