51% of Americans have less than the suggested three months of living expenses in a savings account. Even more scary are the 25% of Americans who have no savings at all.
You might fall into one of these categories and be ready to make a change. If you’re ready to dig into saving for the future and a rainy day, you might be wondering the best places to put your money.
With so many types of savings accounts, it can be tricky to know the best place for your money to go.
If you’re ready to learn how to save money and where to put your savings, read on for more about the types of savings options you could use.
Traditional Savings Account
A traditional savings account is a savings account you can open at every bank. They come with the federal insurance on the money in there. This type of account is nice for beginning savings.
The bank can help you get started and can often connect it to other accounts, making saving easy. This type of account offers a small interest gain on your savings.
Be aware, though, that for many banks you need to have a minimum amount to avoid monthly fees which could offset any interest you gain.
High-Yield Savings Account
As you get further along in your savings, you want to focus more on growing wealth. Many traditional banks also offer high-yield savings accounts too.
This will yield you more opportunity to grow your savings because they pay a higher interest rate. You still have the access and liquidity that comes with a traditional savings account.
Many high-yield savings accounts will have limits on the number of withdrawals or transfers during a savings cycle.
Money Market Account
A money market account is often also available at a traditional bank or credit union. It’s also a savings avenue that yields a higher interest rate than a traditional savings account.
Most money market accounts also come with the ability to use a debit card or check-writing from them.
Certificate of Deposit
A certificate of deposit or CD is a type of savings that also offers higher yields. As a trade-off for the higher yield, you typically lose some liquidity.
CDs require you to put your money into the account for a set period of time without any access, often several years. The return is that you grow your wealth on the funds in the CD with a high-interest rate.
IRA and Roth IRA
If you’re looking for more long-term savings for retirement or college, you might consider an IRA or a Roth IRA.
IRAs come with a good rate of return. When you pay taxes on the money going into the IRA varies depending on the type. It’s smart to consult with a financial advisor for the best option for your individual situation.
Be sure to do a wealth evaluation to help work out your long-term goals and to develop a plan to get there.
Types of Savings Accounts for You to Consider
No matter your savings goals, there are savings types of accounts that will fit your needs. Consider the types of savings accounts and get started securing your future.
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