Now that interest rates have come out of the bargain basement and are on the rise, it's a good time to ensure your savings are in the best interest-bearing account to make you the most money. Thankfully, you have a wide range of different options. Some of the best are explained below:
A Traditional Savings Account at Your Local Bank
If you want to be able to drive down the road and withdraw your savings anytime you wish, then a savings account at a local bank is a good option. However, savings accounts at banks tend to have the lowest interest rates when compared to other options.
A Share Account at a Local Credit Union
If you want to earn a bit higher interest rate than at a local bank and feel like you are investing your money in a bank owned by you and other customers, then a share account at a local credit union is a great option. With a share account, you have access to your money at any time and are part of a group of others forming your own local banking institution.
A High-Yield Savings Account at an Online Bank
If you like to bank online and don't care about having a local branch you can visit to resolve issues, then you can get a much higher interest rate by depositing your nest egg in a high-yield savings account at an online bank. The only downside to this type of account is that there are often delays getting money into and out of the account, and customer service can be spotty.
A Money Market Savings Account
To earn a higher interest rate than a savings account offers, you can put your nest egg into a money market savings account. The only restrictions on money market accounts are that you are permitted only six withdrawals each month. You can access the account via check or debit card.
A Certificate of Deposit
Last but not least, you always have the option of putting your savings into a certificate of deposit. Certificates of deposit are special accounts where you agree to keep your money deposited for a specific period of time in exchange for a specific interest rate.
The deposit time in a CD can be anywhere from a month to over a decade. Typically, the length of the term corresponds to the interest rate. For example, CD interest rates on a long-term investment will be a lot higher than the interest rate on a short-term CD.
You can purchase CDs online or at your local bank or credit union.