6 Ways to Save For Your Future

When it comes to saving, many people have a difficult time. Even when someone wants to save for their future, the options for making this happen can be confusing.

So today we’re taking a look at 6 common financial products, which can make it easy to save, and earn a return on your dollars.

Savings Product #1: Savings Account

If you bank at a Credit Union, they may call this product a Share Account. Your initial deposit amount is usually $25 to $100, which can bring you a .2% to .5% return. This product is government insured by the FDIC (though accounts at some credit unions are privately insured), and your funds are generally available immediately. You can make saving easy with a Savings Account by making deposits at your teller, the ATM, or having funds deposited from your checking account.

Savings Product #2: Online Savings Account

With this account, your minimum initial deposit can be as low as $1, and can bring you a 1% to 2% return. This product is government insured by the FDIC (though accounts at some credit unions are privately insured), and your funds are generally available immediately. You can make deposits to your Online Savings Account with an automatic deposit from your checking account or by a direct deposit from your employer. These products are not automatically insured, so check on their insurance status first.

Savings Product #3: Certificate of Deposit

If you bank at a credit union, they may call this product a Share Certificate. Your initial deposit is usually a minimum of $500, and it is a one-time deposit. Here you’ll generally receive a 1% to 2% return, and can withdraw immediately, though you may be subject to an interest penalty. When your CD matures, you can cash-out and receive total interest accrued. CDs are government insured by the FDIC, though accounts at some credit unions are privately insured.

Savings Product #4: US Savings Bond, Series EE

With this type of US Savings Bond, your minimum initial deposit can be as low as $25, though the minimum is $50 if you choose to buy bonds from a payroll deduction. Rate of return on EE bonds is usually 1.5%. While you can’t buy US Savings Bonds at a bank or credit union, you can buy them periodically, directly from the US Treasury at www.treasurydirect.gov. Where you can also buy electronic Savings Bonds with a checking account deduction. After 30 years, you have to cash in an EE Savings Bond or it will no longer earn additional interest. The purchase price is typically half the face value of the bond.

Savings Product #5: US Savings Bond, Series I

This type of Savings Bond comes with “inflation protection.” You can purchase I Bonds for as low as $25, which usually earn 0 to 2%. They are government guaranteed, but if you choose to access the principal of these bonds you have to wait 12 months, and you lose 3 months of interest. You also buy these bonds at www.treasurydirect.gov with checking account deductions. Their Easy Saver program enables you to make periodic payroll or checking account deposits to purchase additional bonds. Like Series EE bonds, you must cash them in after 30 years, or interest no longer accrues.

Savings Product #6: Money Market Account

You can open a Money Market Account for $250 at most banks, and expect a return of .1% to .3%. They are government insured, though accounts at some credit unions are privately insured. You can access your balance immediately, and getting started is easy from most banks, insurance companies and investment firms.

Sit down with your financial planner or banker today, to see which of these financial products makes sense for you. Then open your account, and commit to saving each and every month.

When you’re old and gray, or when the time comes when you need some serious cash, you will be in a good financial position.

Source: www.americasaves.org

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