There are a lot of ways to save money in the modern era. It’s no longer keeping coins and wads of cash in a piggy bank. The world has changed drastically when it comes to economics, finances, and savings. You could use investment accounts, digital wallets, savings accounts, and more. In fact, the most preferred way of saving money nowadays is through a bank account. Any financial institution that takes care of your money is a better option than you simply putting it somewhere within your home. This is because there are a lot of benefits and features that come with putting your money in a bank, and we’ll discuss such things down below.
Furthermore, there are a lot of new offerings and rewards for people who are just getting into banking. One such example is the Chase sign-up bonus, which is just one of the many rewards you could get for signing up with a bank. Chase Bank specifically offers this type of bonus, with a range of 50, up to 1,250 dollars, whenever you qualify for the signup bonus.
Furthermore, there are two popular ways of saving your money. Savings accounts and certificates of deposit (CD) have their differences, advantages, and disadvantages whenever you’re looking for a way to save money. Below is a discussion on the two of them, and see if any of the two fits your financial goals and savings methods.
Savings accounts. Savings accounts are essentially bank accounts that are specially designed for you to save money. They usually offer a low-risk way of saving and growing your money. Their security comes from being FDIC-insured and having lower fees as compared to other types of accounts. Savings accounts are also very flexible, as you can still gain access to your money at any time and make deposits and withdrawals as you see fit.
One of the main advantages of savings accounts is that they offer a high level of fluidity. This means that you’ll be able to access your money very easily and in no time at all without having to wait for a time period or pay penalties. This is very useful when it comes to you needing access to your money for emergency purposes or other unexpected expenses. Furthermore, these savings accounts have very little minimum balance requirements, so you could immediately start saving even if you only have 1 dollar to your name.
Of course, these savings accounts come with their own cons or disadvantages. For one, they have very low-interest rates. Compared to other types of financial accounts, savings accounts are one of the lowest interest accounts that you could have. This means that the money you’re putting in may not exactly gain a lot of interest by the time you’re pulling it out in the future. In other words, even inflation might catch up to your savings, and you’d actually lose money in the long term.
Certificates of deposits. You could look at CDs as savings accounts that have a set amount of time that your money sits on. During this time, you also earn a fixed interest rate, meaning that you’d know exactly just how much money you’ll gain once the deposit has matured. They are also FDIC-insured, so you’d have a guaranteed return on them. One of their main advantages is that they have a relatively high level of stability, as you know just how much will come back to you by the end of the term. Another advantage is that they offer very high-interest rates as compared to savings accounts. Typically, they offer interest rates that are higher than the rate of inflation. This means that your money will grow despite the inflation rate, so long as you keep an eye on the term and contracts that you have entered.
As with savings accounts, CDs also have their fair share of things to look out for. For example, they have a higher minimum balance requirement than savings accounts. Your money is also not as accessible, as they have a maturation date before you can take them out. This means that your money sits in the bank until they mature, or you’d incur penalty fees if you try to take them out earlier. You have to finish your term before having any chance of getting a hold of your money. CDs are not good for emergency funds and the like.