Growing Your Money in Bank Savings Accounts
All banks have savings plans where your money can earn interest and be safe. Savings accounts are the most common type of accounts in the U.S. You can open a savings account without a minimum initial deposit and for as little as $25.
What makes savings accounts safer and better than stashing your cash under your mattress is that the Federal Deposit Insurance Corporation (FDIC) insures them for up to $100,000, and you earn money on the money you're saving. The balance in your savings account earns interest because the bank uses your money to fund loans to other people.
In other words, the bank pays you to use your money. The interest you receive from your savings account balance usually is compounded daily. And to top it all off, you can withdraw your money anytime you want and not incur any penalties or fees. For more online information about savings accounts see these Web sites:
Bankrate.com: The best part of this Web site is its rate comparisons for mortgages, credit cards, and money market accounts. However, Bankrate.com also provides information on a wide range of personal finance topics, savings accounts, money market accounts, and certificates of deposit (CDs). Phone numbers and links to 4,000 institutions offering savings accounts and other short-term financial products also are provided.
Treasury Direct: This government Web site offers detailed information about marketable U.S. Treasury securities. This information includes auction dates and how to purchase Series EE and Series I savings bonds online. The yield on current inflation-adjusted Series I bonds is higher than five-year Treasury Inflation Protected Securities (TIPS).
SmartMoney.com SmartMoney.com offers an online calculator that assists you with setting your short-term goals. Say, for example, that you want to purchase a new car or house. Although you know how much it costs now, using this calculator helps determine how much you need to set aside so that you have enough money when the time comes to make your purchase.