Saving money is basically putting aside money or a way to utilize your present income for future use.
One saves for several reasons such as for a college education, buying a new car, for a new TV set you wish to acquire in three to four months time, for a down payment on a home, or to provide for yourself when retirement comes.
As much as there are several reasons for saving, there are likewise many methods in which one can save. In most instances, the best method can be determined by whatever plans you have for the future.
When saving for just a short period or for emergency purposes, consider opening a savings account passbook, as it is in this method that you can easily gain access to your funds.
Great for both long and short-term savings, you can deposit and withdraw money to your account and earn interest, based on your average daily balance. A minimum balance is required to be maintained though, and you are charged with a penalty should you fail to maintain it.
Checking account with interest
Here one can benefit from checking account conveniences, while your deposits gain interest. Generally, these types of accounts grant privileges such as limitless withdrawal and check writing, access to ATM, and bill payments that can be done online.
This method typically requires a daily maintaining balance of at least $2,000.
Money market insured accounts
For long-termed goals, this method is ideal, as it generally offers a much higher rate of interest compared to a regular or standard savings account.
The interest rate usually is dependent on the amount of money in your bank account; a larger balance means higher interest.
Certificates of Deposit
This is a savings method requiring you to loan your money to your financial agency for a certain time frame, usually ranging from thirty days up to five years. Here, the longer the time span again, means higher interest.
Keep in mind that usually insurance companies offer better deals on interests compared to banks, so before you invest, compare rates first!
If you are on the opposite side of Saving Money – Owing Money, information on how to Get Out of Debt can be found here.
To find out when you should teach your kid to save check this useful article.
At certain times, when your goal is many years away, it can be a wiser decision to save money in a certain way that you are not drawn to using it other than the main reason for saving it. Deciding on the right financial agency such as a bank, credit union or insurance firm can bring about a lot of benefit to your finances.