While it’s easy to agree that saving money is important, choosing the right type of savings account can be challenging. You may already have a savings account, but does it provide you with the flexibility you desire and features that will help you meet your financial goals? We’ll break down the three types of accounts designed for saving, so you can feel confident when deciding how to grow your money in today’s competitive rate environment.
High-Yield Savings Account: Savings accounts are the most common option for saving money. They earn interest and often come with minimal fees. High-yield savings accounts are a type of savings account that earns more interest than the traditional variety. No matter the type of savings account, you can easily access your money when you need it, making it ideal for short-term expenses like saving for a vacation or paying for car repairs.
Certificate of Deposit (CD): A CD is a type of account where you put money away (on deposit with your bank or financial institution) for a specific period of time, usually months or years, and earn interest. The longer the term, the more money you earn. CDs are FDIC-insured, carry no risk of losing money, and offer a guaranteed return as long as the funds remains untouched. However, if a customer changes their tune and experiences a financial situation that requires a withdrawal, they will forfeit any interest earned by the CD and may also pay a penalty.
Money Market Account: This type of account combines the benefits of a savings account and a CD. It earns higher interest than a traditional savings account while still allowing you to withdraw your money. However, there may be limits on the number of transactions you can complete each month, and the minimum balance requirement to avoid fees tends to be higher than that of a savings account.
When comparing ways to save, it’s important to consider the minimum deposit requirements, any transaction limitations, and any potential fees. It also helps to understand that, regardless of which account option you choose, your money is safe at Camden National Bank and insured up to $250,000 per depositor, per account ownership category, as a Member FDIC bank. We’re here to help you manage your money and plan for your future. If you are considering any of these products, but would like additional advice, stop by, or give us a call 24/7 at 800-860-8821.
