Money that is considered as savings is usually out into a low risk and interest earning account instead of high risk investments. The dawn of online banking has increased the diversity and accessibility of savings accounts. Here are some tips where you can put your money so that you can make the most of your savings.
Savings Accounts
These are usually offered by banks and credit unions. Certain restrictions will be applied to savings accounts like for example, a service fee maybe charged if more than the permitted number of monthly transactions occurred. Money in savings accounts normally cannot be accessed through ATM and checks. The interest rates for savings accounts are usually low. However, online banking will provide higher-yield of savings accounts.
Bonds
A bond is a low-risk kind of debt investment which are issued by companies, states and the government to fund projects. When you are purchasing a bond, you are going to lend funds to one of the entities. In exchange for your fund, the bond issuer will pay interest for the life of the bond and returns the face value of the bond at maturity. Bonds are issued on a specific period at a fixed interest rate. Each bond type will involve changing degrees of risks, returns and maturity periods. Penalties will also be assessed for premature withdrawal and may carry additional risks as with corporate bonds where a company has chances of going bankrupt.
Certificate of Deposits
Certificate of deposits are accessible through most of the banks and credit unions. These are like savings accounts but they normally offer higher interest rates especially with those who have larger deposits. The catch with this is that you must have to keep the money in the certificate of deposit for a specified number of time. If the number of time is unable to be reached, penalties such as a three-month interest will be assessed.
Money Market Deposit Accounts
These are commonly offered by banks and requires minimum initial deposit and balance with limited number of monthly transactions. Penalties can be imposed if the minimum balance is not maintained or if the maximum number of monthly transactions is surpassed. The accounts usually offer lower interest rates than certificates of deposit but the cash is more obtainable.
Savings allow us to keep money while earning fair, low risk returns. Since interest rates are changing constantly, Irfan Qadir banker advices us that it is essential for us to do some research first before committing our money to a particular account which will help us make the most of our savings.
