We stress over and over again how important it is to save money for a number of reasons, but where is the best place to stash your cash? There are different options to consider when saving money depending on what your goals are.
The following are some of the most common ones – think about what would be most beneficial to you and your needs:
Savings Accounts – Savings accounts, offered by banks and credit unions, are a better idea than your standard checking account since you can earn interest just by having money in them (and who doesn’t love free money?). Some banks (often on-line branches, such as Capital One 360) even offer high-yield savings accounts as an incentive for you to use their services. These are great for longer-term goals, since you are limited to six or fewer withdrawals per month.
Money Market Accounts – These are pretty similar to savings accounts, except they usually require a minimum initial deposit, and a minimum balance must be maintained.
CDs – A CD (or Certificate of Deposit) is similar to a savings account, but you have to keep your money in one for a predetermined period of time ranging from months to years, and you can’t withdraw it without penalty. Since you agree to not make withdrawals until it matures, you can get a higher interest rate on these.
Retirement Accounts – You can often get a high return for adding savings to your retirement accounts, but you have to be aware that you won’t be seeing that money for quite some time. This is a great investment for your future, but not the best idea for any short-term savings goals.
And just because it works… Put it in a jar in your closet! It seems silly, but for small savings goals, it works pretty well and it’s simple. I have a jar that I keep out of sight that I tend to throw extra change and dollar bills into – it’s easy to put it in but it takes a little effort to open up, which is a great spending deterrent. Of course this isn’t your best option if you’re looking to buy a house or make another large purchase – your best bet there is to earn interest while saving money in an account (and if it’s saved in a bank, you don’t risk losing it). This idea is great for when an unexpected night out with friends pops up and it might be nice to have a little extra spending cash.
What ways to save work best for you? Send us your feedback!
