There are several different account types when it comes to the savings options available to the public. First, there are accounts that allow for your savings to gain interest over time at fairly favorable rates. The catch here is that these accounts tend to be more exclusive, with stricter approval guidelines. They may also require a more significant deposit on the front end than their average counterpart.
Then there are CD accounts, which stands for Certificate of Deposit. The guidelines can be even more stringent. For example, there’s an agreed upon amount that can be deposited here. That amount is then left to gain interest over a specified period of time. This can be anywhere from half a year to 60 months. These accounts are designed to keep the contents for the duration of their lifetime. Breaching these guidelines often results in extra fees.
In a money market account, it’s a bit of the opposite from the previous savings options. These allow you more opportunities to withdraw funds in the event that you need to. But, they also often mature at a lower rate than their counterparts. Also, even though they’re a bit more open to withdrawals, there will still likely be a limit per month. You may also be required to keep a specific amount in the account per month, with penalties occurring if it falls below it.
Should you choose to go the investment route, then a money market fund may be your best bet. When successful, the overall ROI may be well worth the effort. The kicker is that this comes with less certainty than when dealing with banks, as there is no set return.
Another option would be a bond. Securing one of these involves an upfront payment that leaves the recipient indebted to you. The amount is remitted back to you over time, along with any accrued interest.
One of the best aspects of savings accounts is that they don’t discriminate by age. There are accounts you can set up for the children in your family. This is a great saving strategy for their future, as you can set the privileges on it to not allow any withdrawals. Let it stack up over time, and eventually they’ll have a nice nest egg to fall back on in case of any emergencies.