Saving money is a foolproof way for people to achieve financial goals. But the best accounts to stash cash may depend on savings goals and timeframes. Some people may want emergency savings for unexpected costs and others may just want to feel more financially secure simply by having cash reserves.
From traditional savings accounts to money market accounts to CDs, here's a look where to put savings.
Saving and budgeting are often the core pillars of financial planning. Whether the financial goal is short term, mid term, or long term — this could include buying a home, preparing for a vacation, paying for education costs, or starting an emergency fund — a savings account may help people reach it.
With different savings accounts to choose from, it’s important to consider a range of factors when selecting one.
Different accounts may offer varying interest rates, fees, and accessibility. Certain features may affect the ability to reach savings goals. Those shopping for a savings account should consider the following factors:
Keep in mind, certain savings accounts often align with a specific type of financial goal so it's important to set goals before shopping around. Also, compare and contrast the features of each savings account before deciding on one.
Here are five common savings accounts to consider:
There are two main retirement savings accounts:
IRA funds are generally less accessible before retirement, with penalties for early withdrawals. It's also important to note that the IRS sets annual contribution limits, so there's a limit to how much money can be put into these accounts. As of 2024, the limits are $6,500 for individuals under age 50, and $7,500 for people 50 and above.
When choosing a savings account, it’s useful to assess minimum balance requirements, interest rates, APY, and funds access to find the best fit for financial goals and needs. Here's a summary of possible benefits and limitations of each type of account:
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