A savings account is an attractive option for saving money. It offers interest on any balance you put in the bank, allows frequent withdrawals, and is offered by almost every bank out there. However, a long-term CD may actually be the better option for your investment.
Savings banks offer interest rates as low as 0.05% and usually only go up to 1.00% APY. In comparison, while a one year CD would offer interest rates around 1.00%, a three year CD could offer rates over 2.00% APY. While rates on both savings and CDs will change, a smart investor can predict financial changes and invest during a rising interest period. While many people worry that CDs do not offer enough of a chance to frequently access your money, consider CD laddering as an alternative choice. This financial technique allows you to be no further than a year from at least a chunk of your money. Furthermore, while longer term CDs will offer higher yields, banks will also offer short-term CDs by month.
If you still feel uncomfortable with the idea of CDs, consider getting a money market savings account. These savings accounts give higher interest rates for larger sums of invested money. However, they frequently put a limit on withdrawals and too many can make you incur fees. Once you decide on your type of account, savings or CD, let Wichita Banking Rates help you find the highest banking rates in your area.
