Building your savings is important and having a standard savings account is great, but have you ever stopped to wonder if other savings account options are better for you?
While there’s no one right way to build wealth, a good rule of thumb to remember is “Store your money in an account where it can earn the most interest with little risk.”
Different types of accounts will grow your money more quickly than a traditional savings account and they each have different benefits to offer in terms of access and interest rates. Comparing a variety of savings options can help you decide which option is best for you.
When it comes to your finances, we know how important it is to understand the positives and negatives of each type of deposit account. Below you’ll find some information we’ve gathered to help you make an informed decision.
Share Certificates
A Share Certificate is a savings account that is designed to pay a set interest rate on your initial deposit for a fixed amount of time.
The fixed amount of time is referred to as a term. Terms can range from six months (short-term certificates) to five years or more (long-term certificates). At the end of the term, the certificate “matures,” and you’ll receive the initial amount you put into the certificate, plus the interest that accrued on that amount over the certificate term. The rate of return you receive (and other types of deposit accounts) is the annual percentage yield (APY) and is a fixed rate.
Share Certificate Features
- Fixed interest rates
- Higher rates compared to traditional savings accounts
- Funds are federally insured by the NCUA (Credit Unions) or FDIC (Banks)
- Variety of term lengths
- Money is locked in for term length
- Penalties for early withdrawal
- Minimum deposit requirements
Share Certificates are a great way to save for future expenses. See what Soarion’s Share Certificates have to offer.
High Yield Savings Accounts
High yield savings accounts are a type of savings account that offers better-than-average interest rates on deposits. However, the interest rate offered by a high-yield savings account is variable and can fluctuate. This account also offers account holders flexibility to make withdrawals but may require a minimum balance or deposit limits.
High Yield Savings Accounts Features
- Higher rates compared to traditional savings accounts
- Funds are federally insured by the NCUA (Credit Unions) or FDIC (Banks)
- Flexible withdrawal options
- Variable interest rates
A High Yield Savings Account is a great option for an emergency savings account. Discover the benefits of a High Yield Savings Accounts from Soarion.
Money Market Accounts
Money market accounts share similarities with both savings and checking accounts. This saving option allows account holders to earn interest, like savings accounts, while still having access to your money that you get with a checking account. There may be some limitations related to withdrawals and minimum opening deposits for a Money Market Account, but that varies depending on the financial institution.
Money Market Account Features
- Higher rates compared to traditional savings accounts
- Funds are federally insured by the NCUA (Credit Unions) or FDIC (Banks)
- Potential deposit requirements
- Flexible withdrawal options
- Variable interest rates
A money market account may be the ideal option for you if you’ve already built a nice cushion of savings and are looking to earn more. Find out if a Money Market Account from Soarion is right for you.
Knowing the basics about these different types of savings accounts can help you take control of your money. Plus, you’re not limited to just one type of savings account. You can open a number of them to maximize the benefits for your finances.
