Crystal Mayer
·4 min read
If you have reached a certain point in your career, you may have a little bit of extra money set aside. While you know that storing your savings in the freezer is not the best idea, you may not be too sure where you should keep it to get thebiggest bang for your buck.
Jaspreet Singh: 5 Assets To Buy So You Never Have To Work Again
Find Out: 3 Simple Steps You Must Take To Shield Yourself from Identity Theft
GOBankingRates reached out to financial experts nationwide to find out the safest — and smartest — places to keep your savings.Here are four tried-and-true methods for protecting your money and maybe even watching it grow.
High-Yield Savings Account
Across the board, most of the experts agreed that a high-yield savings account is one of the best ways to keep your money safe.
Garit Boothe, the owner ofDigital Honey, said, “These accounts offer higher interest rates than traditional savings accounts and are FDIC-insured, which means that the government will protect your money up to $250,000 in case the bank fails.”
Ian Wright, managing director atBusinessFinancing.co.uk, agreed: “High-yield savings accounts offer a variety of benefits, including higher interest rates than regular savings accounts, low fees, FDIC insurance for up to $250,000 in deposits and convenient access to your funds through online banking or mobile applications.”
“Additionally,” he said, “many high-yield savings accounts offer bonus interest rates on deposits that stay in the account for a certain length of time. This encourages you to save, and your money can still grow even when it isn’t actively being used.”
I’m a Financial Planning Expert: Here Are 5 Things You Should Never Spend Money on If You Want To Be Rich
Certificate of Deposit (CD)
If you have some extra money that you won’t need in the next few months, a certificate of deposit can be a great option for reliable earnings, especially right now with interest rates soaring.
“A great thing about CD accounts is that your rate is locked in,” said Morgan Gray, SVP, Head of Bask Bank and Consumer Segmentation. “When rates are high, as they are right now, you are guaranteed that interest rate through the length of your CD term. So, no matter what the rate environment looks like over the course of that term — six months, a year or longer — you’re still going to earn the rate you did when the account was opened.”
Gray says another added benefit of choosing a CD is that it encourages responsible saving.
“If you don’t want to be tempted to spend your savings, CDs are a great option to ward off impulse spending and reward you with high interest returns at the end of the account term. By choosing to open a CD account that’s FDIC-insured, you’re also adding an additional level of security to your savings.”
Money Market Account
“Money market accounts are a type of savings account that offers a higher interest rate than traditional savings accounts and can be a good option for keeping your savings safe,” saidAndrew Lokenauth, a personal finance expert. “They often have higher minimum balance requirements than other savings accounts, and they may also have limited check-writing capabilities. Money market accounts are FDIC-insured up to $250,000.”
“Money market accounts are more flexible than the average traditional savings account,” said Gabriel Lalonde, president ofMDL Financial Group. “They offer a higher interest rate than traditional savings accounts, and they work essentially as a hybrid deposit account with check-writing and debit card privileges. They are FDIC-insured, meaning that the government backs your money.”
Treasury Securities
“U.S. Treasury securities, such as Treasury bills, notes and bonds, are considered to be among the safest investments because they are backed by the full faith and credit of the U.S. government,” Boothe said.
Lokenauth added, “They are considered to be a very safe investment, as they are backed by the full faith and credit of the U.S. government. However, they do not offer a high rate of return, as they are meant to be a low-risk investment.”
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Experts: 4 Safest Places To Keep Your Savings
As a seasoned financial expert with a deep understanding of various investment vehicles and wealth management strategies, let's delve into the concepts discussed in the article by Crystal Mayer dated August 18, 2023. The article focuses on the safest and smartest places to keep savings, drawing insights from financial experts nationwide. Given my demonstrable expertise, I will provide valuable information on each of the four tried-and-true methods presented in the article.
1. High-Yield Savings Account:
Expert Insight:
- A high-yield savings account is highlighted as one of the best methods for keeping money safe.
- Garit Boothe, the owner of Digital Honey, emphasizes the benefits, including higher interest rates than traditional savings accounts and FDIC insurance up to $250,000.
Additional Information:
- Ian Wright from BusinessFinancing.co.uk supports the idea, citing benefits such as low fees, convenient access through online banking, and bonus interest rates on certain deposit periods.
- These accounts encourage saving, allowing money to grow even when not actively used.
2. Certificate of Deposit (CD):
Expert Insight:
- Morgan Gray, SVP, Head of Bask Bank and Consumer Segmentation, recommends CD accounts for reliable earnings with a locked-in interest rate.
- CDs provide security against impulse spending and offer FDIC insurance, enhancing the safety of savings.
Additional Information:
- CD accounts are advantageous when interest rates are high, ensuring a fixed rate throughout the term.
- Choosing an FDIC-insured CD adds an extra layer of security to savings.
3. Money Market Account:
Expert Insight:
- Money market accounts, as explained by Andrew Lokenauth, offer higher interest rates than traditional savings accounts and increased flexibility.
- Gabriel Lalonde of MDL Financial Group emphasizes their hybrid nature with check-writing and debit card privileges, along with FDIC insurance up to $250,000.
Additional Information:
- Money market accounts often have higher minimum balance requirements than regular savings accounts.
- They strike a balance between flexibility and safety, making them an attractive option.
4. Treasury Securities:
Expert Insight:
- U.S. Treasury securities, including bills, notes, and bonds, are presented by Garit Boothe as among the safest investments due to government backing.
- Andrew Lokenauth adds that while they offer safety, Treasury securities are low-risk and do not provide high returns.
Additional Information:
- Treasury securities are backed by the full faith and credit of the U.S. government, making them a secure investment.
- They are suitable for risk-averse investors seeking stability over higher returns.
In conclusion, the article provides a comprehensive guide for individuals looking to secure and potentially grow their savings. The presented experts offer valuable insights into high-yield savings accounts, certificates of deposit, money market accounts, and U.S. Treasury securities, each catering to different risk appetites and financial goals.
