Personal Finance And You

For many, the options available when it comes to developing a plan of action for their money can be a perplexing world with so many services and products offering advantages over one another. However, simple research will help one understand these products and how they will be of benefit when designing goals and setting terms for meeting their personal finance needs.

Savings

Saving is crucial when attempting to create personal financial freedom. Not only does savings mean that you can purchase items other than what are considered necessities, but it ensures one’s ability to meet the needs of special circumstances or emergencies that may arise in his or her every day life.

Simple Savings Accounts

Simple savings accounts have traditionally been a great way to put money back into an account that is deemed off limits. An initial investment is set aside and put into an account that one wishes to continually infuse capital, there by growing this account over a longer period of time. Simple savings accounts can do just that although that do not offer the more aggressive percentage yields as do other forms such as money market accounts and CD’s.

Money Market Accounts

Money market accounts have grown in popularity over the last few decades. These specialized savings accounts allow one to create a way to save money while getting a larger percentage rate for this type of savings. For instance, with a traditional savings account, one may only yield one percent or less earned interest over the period of a year; however, with a money market account, one can almost double that earned percentage yield over the same period of time as the simple savings account.

One should be aware that with this more aggressive savings account, there are more rules and limits a bank may put on these specialized accounts. For instance, with a  simple savings account one may be able to withdraw money from these account any time he or she wishes, but with a money market account there may be penalties that accrue if one makes withdrawals more than once a month or possibly three times per year.

CD Possibility

Along with money market accounts, another way one may choose to invest in a savings account is to purchase a CD from his or her bank. CD’s usually offer a higher perentage yield over a specified time period. Normally, the longer time you have until your CD meets its maturity, the larger percentage yield you may get in. For instance, one may invest in a twelve month CD. Over the next twelve months, the money invested into this CD is off limits, meaning it cannot be withdrawn for any reason. However, after this time period is up, one can withdraw the money and will have earned a certain percentage rate of interest on that online investment. Again, this is normally higher than traditional savings.

It’s Your Money

Depending on whatever form of savings strategy you devise, remember that it’s your money and you should research all options before choosing one over the other. Banks and credit unions are usually more than happy to assist one looking to tailor a specific account to his or her needs.