It is important to learn to save money instead of spending it. Budgeting money to put into your savings account is an important basic investment strategy. While the interest rates and return on investments are lower compared to other investment options for savings accounts, they are less risky and a safer way to accrue money. These are the three basic types of savings accounts that singles can invest in to increase the value of their money over time.
3 Basic Savings Accounts Singles Can Use To Save Money
Basic Savings Account
This is the standard account. You should make sure that you have a savings account with your bank. Banks may offer two different types of saving accounts depending on the amount of money that you are able to put into it. The basic type will have the standard national interest rate of 0.01% while a premium savings account will have around a one percent interest rate. Federal law limits transfers each month from saving accounts to other accounts to only six per month. A basic savings account is a good place to start to begin to accrue money.
Certificate of Deposit (CD)
Certificates of Deposits (CD) offer a higher interest rate than savings depending on the time period that you choose, but you will face a penalty if you take out the money within the deposit chosen term. The length of the investment term will result in an increase in the interest rate for the certificate of deposit. Certificate of deposit terms range from a few months to a year to a few years. These are a great choice to beat the low interest rates of a basic savings account or to save up for a long-term goal such as purchasing a car or putting money towards a mortgage for a house.
Money Market Savings Accounts
The third basic savings account option is a money market account. Money Market Accounts (MMAs) are specialized saving account that banks and credit unions offer customers. Money Market Accounts can also be called money market savings accounts or deposit accounts. These accounts are normally offered at tiered interest rate levels or fee waivers for maintaining a certain balance each month. This type of account is a great choice if you want a higher interest rate than the basic savings account and are willing to a larger amount of money into a money market account. This account type is best for investors who have long-term savings investment goals and who want to accrue a higher interest rate over time since terms range from a few months to years.
Related – 15 Habits To Build Wealth For Singles
Singles should financially prepare themselves for their future. These three different types of savings accounts are great starting points for singles. After these savings accounts have successfully been used and you become more knowledgeable about other ways to invest, creating a portfolio that includes bonds to stocks is a good idea. In the meantime, work hard and continue to put money away into savings accounts.