We previously shared strategies to reach your financial goals in our post, "What Are You Saving For?". In this post, we're sharing some tips for choosing the right savings tool. A traditional savings account isn't your only option when it comes to growing your savings. Find out which tool will get you the most bang for your buck!
Short-Term Savings Goals
Low-risk accounts earning compound interest with higher Annual Percentage Yield.
- High-Yield Savings Accounts - Pays up to 10 times the interest rate offered by traditional accounts.
- CDs (Certificate of Deposit) - Must leave funds in for full-term to avoid early withdrawal penalties in most cases.
- Money Market Accounts - Interest rates vary with the market.
Mid-Tern Savings Goals
Low-medium risk accounts earning higher Annual Percentage Yield.
- 529 College Savings Plan - For educational purposes only, can be invested.
- Mutual Funds - Medium risk with potential to yield higher returns. Annual fees required.
- 401(k) or IRAs are higher risk accounts invested over a longer period of time. You can withdraw penalty-free at 55 and 59 1/2 years old, respectively.
Need help saving for your goals? Call us at 781-635-9022. We know excellent South Shore finance professionals who can get you started.