Saving Money For Newbies -4 Venues For Saving Money
Saving Money For Newbies -4 Venues For Saving Money
Saving money is basically just setting aside a percentage of current income now to create a financial hedge or surplus for use in the future.
Cash accumulation methogs come in many different forms. Additionally, there are several reasons that people choose to save. However, your method for saving should be190-620 based on what you plan to do with the money in the final analysis.
1.Petty Cash Savings Accounts.
This type of account is only good for short term money savings. You have flexibility with it. You can deposit and withdraw money to your account and earn interest, based on your average daily balance. The interest gained will be very low though because it is not a wealth accumulation vehicle.
If you make a mistake and use more money then what is currently on deposit in your account the bank will charge you an insufficient funds fee as high as $40 per occurrence. The bank will sometimes forgive your error and return this fee if you ask them to. They won’t do this for you every month though.
2.Checking accounts that bear interest.
In order for you to not be charged a monthly fee to maintain this account you typically must maintain a daily balance as high as $2,000. Should you be neglectful of this account and become delinquently overdrawn with the bank, you will be reported to ChekSystems. A report to ChekSystems will mean exclusion from having a checking account with virtually every American bank or Credit Union for up to five years or longer depending on the severity of your account abuse.
3.Secured money market accounts (MMA).
If you have a larger balance on deposit in this type of account, this means the account will accrue at a higher interest rate. Don’t go to the bank for a money market account though. They usually offer considerably less than the money market accounts offered by insurance companies or other investment companies.
4.”CDs” or Certificates of Deposit.
Keep in mind that usually insurance companies offer better deals on interests compared to banks, so before you invest, compare rates first! However, you should avoid saving your money in a life insurance product. It is wiser to keep your savings and life insurance coverage separate. Otherwise, you will pay higher amounts for your insurance and your money will grow at little or no return for up to three years initially and for the duration of the account compared to other investment alternatives.
Remember, the savings or investment vehicle you choose to use should be based on your overall financial objective. Diversification is not just making sure that you don’t put all 190-623your eggs in one basket. It also means that you have to look at whether you can afford the risk of losing your total investment.
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