We get it. Summer can be expensive. From graduation presents
and summer vacations to home renovations and expensive recreation, the dollars
we so diligently watched over since January seem to fly out of the window. That's why it's important to remember that
saving is not a seasonal sport and treating your savings gameplan like any
other expense can help you stay on track.
Hopefully, things have gone according to plan for you and
the money you are spending on trips and activities this summer is money you
already had set aside for these reasons. But life does happen and so do car
repairs, loose roof shingles, and broken washing machines.
Savings options like CDs and money market accounts may be
just the ticket to staying on track with your savings game this summer.
For many, depositing their money in a certificate of deposit
(CD) may provide the feeling of security they seek while their money earns
interest at a higher rate than a traditional savings account.
What exactly is a certificate of deposit? A certificate of
deposit, commonly called a CD, is a special savings account you can open at
most banks and credit unions. But unlike a regular savings account, CDs require
you to lock your funds away for a specific period of time until a maturity
date. In return, you'll get a higher interest rate.
This unique feature makes CDs perfect for a long-term
savings goal. You can get better interest rates than a savings account would
give you.
A money market account (MMA) is a type of flexible deposit
account that offers higher interest rates on your funds than a traditional
saving account. But unlike a certificate of deposit (CD), there are no penalties
for accessing your money market funds early. Plus, the interest that you earn
can be withdrawn once it's posted to your account!
A money market account is like a mix of a savings account
and a checking account. Like a checking account, money market accounts often
include ATM cards and/or check-writing abilities, depending on your bank or
credit union. However, money market accounts are not quite as flexible as
checking accounts. They do limit you to outgoing transactions, like withdrawals
and transfers, per statement cycle, just
like with a savings account. But that can be a good thing if your goal is to
only touch that money occasionally, if at all.
Lastly, a traditional savings account might be the best
option for you. Every Telhio member has a share savings account with a
minimum of $5 on deposit. It's what makes you a member! Your account earns
interest daily, which is compounded and paid monthly. All of our savings
accounts come with free online banking access.
Whichever savings route you choose, we recommend you adhere
to a few simple guidelines:
∙ Pay
yourself first each paycheck. It can be $25 or $200 — whatever fits your budget
— but make sure you put money into savings each paycheck.
∙Direct deposit a
portion of your payment into a savings account. Just set it up and forget it.
∙ Treat your savings like a priority bill. Don't wait until
your other bills have been paid
∙ Set your savings goal to 10 percent of your net income.
If you can't do that percentage right away, that's fine, every little bit
helps. But make it your ultimate goal. If you are able to save more than 10% of
your net income, that is even better.
∙ Contribute small additional amounts when you can. When
there are times during the year when you receive extra money, put it in your
savings.
Telhio Credit Union MMAs, CDs and savings accounts can be
opened online or in any Telhio Branch Location. Visit telhio.org to learn about
special rates.
