Personal Finance

Top Five Ways to Save Money

Do you dream of living debt free? If you do then you will need to make some provisions so that this can happen, and looking into different types of savings accounts is one of the best ways to accomplish it. The top five tips to save money can all be used or choose the ones that best fit your needs. Savings accounts are no longer just found at local banks or credit unions. Many institutions found online offer savings choices. You must make sure however when choosing a savings account that your money will be protected.

The traditional savings account that is offered from your local bank is going to be federally insured so your money is safe. You don’t need a large amount for a savings account and you have easy access to your funds. The thing about this type of savings account is that the interest that you will be paid is very small, sometimes less than one percent.

Online banks often offer better interest rates than their more traditional counterparts. You need to make sure that the online bank you choose is also federally insured though so you have the same guarantee as your local banking facility. One drawback to an online bank is that you may need a larger amount to open the account. If this is not a problem this could be a better way to save money, so make this tip number two.

When the economy is more robust interest rates can be higher which means that your savings account generally benefits as well. While we wait for an economic upturn you could put your money into CD or certificate of deposit. You won’t be able to get money from this type of savings account until the due date of the CD. This type of savings account is great if you have money that you can park for a determined length of time. You can choose the amount of time you think is best, but remember you almost always get a higher rate of return the longer you leave it in. This type of savings account is also federally insured so it is a safe way to save.

You could open a money market account for this fourth tip. This is an interest bearing account that may pay better than a traditional savings account. Again you may have to deposit a higher amount and retain a certain amount in the account at all times to keep a specific interest rate. Generally you can withdraw money by writing a check, but the amount of checks you can write might be limited. These accounts are safely insured.

The fifth tip for different types of savings would be a US Savings Bond. These bonds are government issued and can be purchased at local banks. This money will be tied up for a longer period of time before they mature, so if you will need this money in a couple of years they may not work for you.

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