What Savings Account is Best for You?
In a world full of unlimited information, we seem to get lost at times and never know what is credible and what is not. This can translate to your financial education as well. Finding out which savings account or accounts works best for you can seem like a hill that can’t be climbed, but that doesn’t have to be the case. Each financial institution has unique ways that they offer products and services, but most offer these key savings accounts that can set you up for financial success. Understanding these accounts is the first step in deciding which account or accounts will fit your needs and financial goals.
Classic Savings Account
Classic savings accounts can be very versatile and work for almost anyone. These accounts are normally basic and are great for someone starting their financial journey. These accounts tend to have lower interest rates, but also, lower minimum balances.
Certificate or Certificate Deposit
Looking to save long-term? Certificates or Certificate Deposits (CDs) are for long-term savings. These accounts have set maturity dates and have higher interest rates than classic savings accounts. Certificates are for individuals that can put away money for long periods of time and not touch it.
Health Savings Account
Although Health Savings Accounts normally are not as popular as the other savings accounts, many people still use these accounts. The point of Health Savings Accounts or HSAs is to save money in a separate account used for health expenses. Whether that be doctor visits or more expensive care, HSAs are there for you if life takes an unexpected turn.
Money Market Account
Money Market Accounts give you a greater return on your investments. These accounts are there for individuals that want to be able to take out money that they put into their accounts, whenever they want to. Since this is the case, these accounts have higher minimum balance requirements and charge fees if that minimum balance isn’t maintained.
Individual Retirement Account
Individual Retirement Accounts are for one’s retirement. There are two different types of IRAs, traditional IRAs and Roth IRAs. These accounts are pretty similar in the details, but Roth IRAs have a few tax exemptions that Traditional IRAs don’t have. If you are younger, many recommend taking out a Roth IRA.
Specialty Savings Account
Many financial institutions have different types of specialty savings accounts. Most of these accounts are for saving for specific purposes, like for a new car or a vacation. These accounts normally have maturity dates set up and vary in interest rates. Specialty Savings Accounts may work best for you if you have something you are specifically saving for and have a hard time not touching the money.
All these accounts are great ways to start planning for your financial future wherever it may take you. Understanding each of these accounts is the first step in deciding which account works best for you. It is also important to note that many decide to have multiple savings accounts.