In the series about starting to save money, we have talked about everything from getting started to finding money to save and drawing up a proper plan for their savings. This step is more about what you can do with your money once you get started with your savings. If you have managed the tough bit to actually get started, then it is important that you make something sense with your money and find a good savings form.
In this post, we will therefore explore some different opportunities for savings and then also some opportunities to invest money in such a way that you get a reasonable return. If you have money that is just lying that is not used for something, you would like to put it to work and possibly earn a few bucks. We’ll look at everything from savings accounts to stocks and funds.
In this post, we focus on specific savings accounts and the next part deals with investments in equities and funds
While you would like to get a return on your saved money, you should also keep in mind that just a buffer is money that should be available in case you get financial problems, why you should not invest such money with too much risk or tie them up during a long period. This may be worth considering when deciding on savings.
Save money in savings accounts
Saving your money in a savings account is basically the safest form of saving you can have where there is the opportunity to get some return on the money you have saved. In this case, you choose a savings account of the type you are interested in and deposit your money there. The savings account has a certain savings rate, which means that in one year you will receive a few percent interest on the money that is in the account and the money multiplies. There are a variety of savings accounts depending on how long you can imagine leaving the money without touching them, etc. The interest rate is affected by this.
As mentioned, there are several different types of savings accounts. Some are simpler and have no major requirements on you and your savings but others may have rules on how long you must have the money lying in the account, how much you can deposit or withdraw, etc. Accounts that have more restrictions are the ones that are more long-term and these offer a higher interest rate, for example that you cannot withdraw the money in one or more years.
Simple Savings Account (E-Savings Account)
The easiest choice for someone who wants to save money in a savings account but still wants the freedom to withdraw money at any time, for example, is a regular E-savings account that you obtain through your Internet bank. Such an account can often be set up entirely on your own and take care of yourself. The bank does not have to manage the account and does not send out bank statements etc, which they are happy with. You get a pretty good savings rate, and when you want to transfer new money and withdraw money at any time in case of urgent need. Thus, such an account can be good for an economic buffer.
Long-term savings accounts
If you want to save money in the longer term, you can get a slightly higher interest rate on your money. There are different accounts for this and different banks have their own savings accounts to choose from. The terms may vary, but the main thing to know is that you probably need to determine a minimum binding period for your savings, for example between 1 and 10 years. You can then normally not move your saved money before the time has expired, at least not without paying a fee for your withdrawal. It is also conceivable that there is a minimum amount that must be deposited into such an account, for example USD 50,000. A long-term account can work better for anyone who wants to save for something specific in the future, such as a new car.
Choosing a good savings account
The choice of savings account depends on several factors. Firstly, you need to be clear about what your money is for. If there is money available as a buffer for financial problems etc, it may not be good to tie them up for a too long period ahead. You have to try to have some money ready that you can quickly pick up in case something happens. However, if you have a large buffer, it may work to have some of the money available while the rest is invested in the slightly longer term. If you instead want to save for something else in the future or simply got a good saving where you have a lot of money to put away, you can invest in a savings account with more focus on the future and better returns.
Finally, you can say that the best thing is to simply talk to your bank. There are normally a number of savings accounts to choose from and if you want to start saving or have saved some and want to make the most of your savings, you can talk to an adviser at the bank. He or she will be able to suggest good savings that suit you and your goals.