CDs VS Savings Accounts

So you’re sitting on some cash and you’re wondering whether to put it in a CD or savings account. With certificates of deposit and savings account rates being so low it might not make a difference where you put your cash right now. But, we’ll discuss as there are some advantages and disadvantages to each option.

Certificates of Deposit

You’re going to want to ask yourself if you’re going to need the cash anytime soon. Depositing your cash into a CD will lock up your money for some time. Most CDs can be purchased in fixed terms such as 3 months, 6 months and 1 year. Meaning, that your money would be locked up for that time frame and in exchange you would recieve an above average interest rate that is guaranteed by the FDIC.

Most banks or brokerages will charge a penalty if you withdraw or cash out the CD prior to the end of the term. This will impact any interest earned as the fee would likely be greater than any interest earned. Point being, is that you need to make sure that you’re not going to need the money prior to the end of the term.

Savings Account

Putting your money to work in a savings account can also generate a solid interest payment every month without having to lock up your money. In most times, you’ll get a rate that’s generally lower than a CD but without having to lock up your money. This would likely benefit those that want to earn a great interest rate but want to make sure to have immediate access to their cash.

You’re going to have to be careful because some banks do charge monthly fees and have account balance minimums that will impact interest earned. In addition, you’ll have easy access to your money, which for some, including myself makes it very challenging to save money.

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60,000 Reasons To Save

We came across a disturbing article on the web that has become the norm in the U.S. Saddled with credit card debt and nowhere to turn consumers that have relied on the all might credit card are paying dearly now.

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To fund lifestyles, consumers used credit cards to pay for christmas presents, daily meals, video games and department store binges. Now they tell sympathetic stories of the damage they’ve done to themselves and to their families lives.
Hopefully, times like these will turn our nation into realizing that spending without regard will eventually catch up to you. It seems a lot of people are already learning that the hard way.
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Bank of America’s – Add It Up – Savings Program

Bank of America’s Add It Up savings program is another great way to start saving cash on everyday purchases. 
Add It Up allows you to earn cash back, sometimes up to 20% on purchases made with partnered retailers. The percentage received is on top of any retailers discounts.
To get started, all you need to have is an existing checking, savings or credit card account.  You can open an account online or in the branch. You can enroll online as well.
Like Bank of America’s Keep the Change program, the program works because it triggers automatic saving deposits into the account of your choice. Saving money is challenging at times. Bank of America provides a great solution and an option to continually save money.
One of the best features is that you have an option to have the cash back deposited into a savings or checking account. Hopefully, you make the best use of the program and have the cash back deposited into your Bank of America savings account.
A combination of this product, Keep the Change and a high yield online savings account can go a long way in diversifying and growing your hard earned cash.
Right now, it’s best to look at every avenue that’s available to save additional dollars. Even in the form of cash back on purchases. 
See Amanda cover the basics on Bank Of America’s Add It Up Savings program.

Direct Huntington – Savings Account – High Yield

An online savings account from DirectHuntington isn’t one of the best offers out there.  The Anywhere Savings Account offered by DirectHuntington is unfortunately one of those tiered rate accounts which require a minimum balance threshold in order to earn a higher yield on your money. We’ve seen some pretty bad tiers out there, with pretty much all our nothing in terms of a yield. Direct Huntington actually has multiple tiers so you are at least receiving a average rate across all tiers.

There are some aspects to the account that are beneficial to you however they’re nothing that all of the other online savings accounts have to offer. 

The Anywhere Savings Account offers:

An better than average interest rate (low compared to other online savings accounts)
No monthly maintenance fees
Online banking
There are several tiers to this account which are listed below. We’ll list the current rates but please keep in mind these are subject to change.
$0 – $2,499.99      0.50% APY
$2,500 – $9,999.99      1.00% APY
$10,000 – $19,999.99      1.20% APY
$20,000-$49,999.99      1.40% APY
$50,000-$99,999.99        1.60% APY
$100,000-$999,999.99   1.80% APY
$1,000,000.00 and Up    0.50% APY
More than the average amount of tiers but better than the rest. Ideally, if you have this amount of cash sitting in an account, you should look to opening a account with ING, Schwab, ETrade or WTDirect. All which offer a much more stable rate without the tiers.
*Account not available to California Residents/Accounts need to be approved by DirectHuntington prior to opening.

Provident Direct – High Yield Online Savings Account

A Provident Direct high yield savings account online offers a high rates. A $100 deposit will earn a 2.10% interest rate! This rate is higher because it’s an online savings account. 
Provident Direct is the online arm of Provident Bank and has just been acquired by MT&T bank.

The money saved in this type of account is FDIC-insured which means the money is well-protected and invested with a well-trusted bank.

The money in your high yield online savings account can be easily accessed online, through an ATM or at any branch.

This online savings account offers a solid rate along with no minimums and no monthly fees. Deposits can only be made by direct deposit or online transfers. Acceptable, because of the high yield.

If you want to start immediately earning a higher interest with your savings account, open a Provident high yield online account here.

ShoreBank Savings Account

ShoreBank’s High-Yield Savings Account has many pluses such as a high annual percentage yield. This great rate is possible because these accounts are opened and managed completely online.
It has a few advantages such as:

Manage savings online by making electronic deposits and withdrawals

Online access to bank statements

No monthly fees
$1 minimum deposit
Being able to make email inquiries – (in order for ShoreBank to provide such a solid rate, they are pushing customer service to online support)
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Deposits at ShoreBank are FDIC-insured to the insurance limit which means individual and joint accounts are covered separately so those who have a ShoreBank joint account and a single account will receive the maximum FDIC coverage which is $500,000.

It’s also good to note that the online savings account application must be approved.

For more information about this online savings account, visit ShoreBank.

Tips for Successful Saving

A common problem that many people face these days is the ability to save their money consistently to build for the future. In many cases these people end up spending what they should be saving leading to even more problems down the road. 

In the article the Secrets of Successful Savers, M.P. Dunleavey talks about how difficult it can be for people to save and what they can do to be able to consistently save when it can be difficult for them. 
Some of the different strategies that she writes about include: having a certain percentage automatically moved from your checking account into your savings account each week, placing your money into a certificate of deposit (CD) or money market account and having part of your pay check moved into your checking account while the other part is moved into your saving account. 
She also mentions the ability to maintain the pace of saving by suggesting that you act immediately when setting up how you will go about saving, getting support from a friend, ways to make savings easier and how you can avoid falling in the spend to save routine. 
Clearly, Dunleavey has some great ideas as to how you can save and what you can do to be able to able to avoid falling into your old spending habits, something that will help anyone build for their future.