Saving vs. Investing

The adage is always out there – “Save your money! Save, save, save!”

But is saving money the best option? Is stacking cash on top of cash the best way to manage your funds?

It is advised by many to save 3-6 months of living expenses in your bank account in the case of a major emergency or unexpected unemployment. But once you cross that threshold, is it worth putting that much more cash on top of a savings account that often accrues little to no interest? Here are a few financial options other than a standard savings account.

Certificates of Deposits (CDs)

These deposits are fixed for a certain term, which can range from 6 to 60 months, and usually yield a dividend rate between the low tenths of a percent to near two percent. The money must stay in the account for that term and most likely cannot be withdrawn without penalty or a minimum withdrawal limit*.

Money Market accounts

Though these checking accounts have higher interest rates than a standard checking account (think 0.15-0.35% instead of the benchmark 0.05), these accounts often require higher account balances to get the higher interest rates. The higher account balance required, the higher interest rate you’ll likely receive.

Retirement accounts

Now, you could be thinking that you’re putting away enough money in your retirement accounts for the future but the fact is you can generally get a higher return on investment if you put a little more into your retirement plan. Interest.com reports that a “reasonable” annual return rate is 6 percent. Continue Reading >

Find out how you could better invest your cash by visiting a Travis Credit Union branch.

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*Travis Credit Union does not offer financial advice. For professional service, please consult a financial consultant.