Savings accounts can be used in different ways. It can be used for wealth-generation, or for being able to create a financial reservoir for purchases. Here are top five ways that you can best leverage savings, as opposed to investment accounts like stocks or mutual funds.
In creating a retirement fund, investments with compounded interest are best. However, it also helps to keep some of the money set aside for retirement purposes in high interest accounts. Rather than put all your eggs in one basket, it's always wise to diversify. When it comes to investment, savings and wealth-generation, diversification is the keyword.
When saving up for major purchases, like real-estate property, whether residential or rental property, your savings can also be put to great use. Investing your money may not only take time, it may also take some paperwork and a degree of difficulty to liquidate the funds. Also, investments like stocks, even mutual funds, are meant for the long-term: these are not meant to be touched for at least five years.
When creating a college fund for your college-bound kids, a 529 Savings Account may be the best choice. This is because that specific account does not get taxed. Also, there are quite a number of other financial institutions that give rewards when you save in a 529 Account: Upromise credit cards gives rewards that will be credited to your 529 account. BabyMint also offers rebates which you can deposit to your 529 Account instead. Ohio CollegeAdvantage 529 Accounts also gives rebates for its refer-a-friend program. As you enroll your whole family, you may well be able to recoup the amount you've invested in opening the accounts.
Saving up for major purchases and expenses like furniture, computer equipment, home repairs could also benefit from high yield savings and CD/time deposit accounts. Instead of using your credit card to make these purchases, you can make use of the high-interest accounts to allow you to not only store your money as you gather the entire amount of what you need, they would also allow you to earn interest on the money you gather.
Debt help experts like Dave Ramsey recommend building an emergency fund even as you move to obliterate your debt. Try opting for accounts in banks like EverBank or Ally Bank. Both have higher interest rates than the regular savings accounts, but try looking at either this EverBank review or this Ally Bank review and see which bank you'd prefer more. Keeping your emergency funds in these high interest accounts would not only help you keep your emergency funds intact, they would also help you allow your funds to gain higher interest returns. Just make sure that you keep shorter contract times for CD's, however, and keep the bulk of your accounts on the money market accounts. That way, if emergencies do arise, you can withdraw your funds faster. Then just to make sure that you have liquid funds available for those urgent emergencies, keep a stash of money in a bank account you should never withdraw from. Make sure you find the highest interest rates in the market to make the most out of these accounts.
As you can see, savings accounts can be made use of in various ways. More than allowing you to store your savings, our suggestions here will help you explore the other possibilities for savings accounts. And had you never heard of high yield savings accounts before this article, we're glad to be of help! Make the most out of your savings accounts by choosing the best banks, the best account types, and the best interest rates available to you.
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For more information, please visit: High Yield Money Market