Expert advice to help boost your savings account
Savers typically put aside $985 each month
NerdWallet Banking Specialist Chanelle Bessette said interest rates are high right now, so you should try to find a savings account that will yield better than average returns (average annual yield as of this writing is .25%, per Bankrate). Also, consider certificates of deposit.
“They’re better for a medium to long term goals because you are going to put that money away for a while, not touch it unless you want to be subject to a penalty for an early withdrawal,” Bessette explained. “But the rates on those are really high, so if you’re thinking about something like saving for a house down the line, it’s really great to set aside money there and let it earn interest.”
Bessette also said it’s OK to save for the long-term, while also putting some away for fun, like a spa day or a last-minute vacation. She said to prioritize your emergency fund and then create other accounts for specific purchases or expenses.
Bassette said a good goal is to set aside 20% of your income for savings, retirement, and future expenses.
She shared several tips to help grow account balances:
- Comparison shop among different banks to find a good fit
- Look for low fees and high interest rates on savings accounts
- Set a goal of $500 dollars for an emergency fund
- Once you have $500, up the goal to $1,000
- After this, aim to save a minimum of three to six months’ worth of expenses
Lastly, Bassette said don’t discount small moves. Every little bit helps, especially when you unexpectedly need extra cash.
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