Saving up doesn't have to tie your money down

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Saving up doesn't have to tie your money down

Just because you want to save money doesn't mean you have to lock your money away for a long period of time. The key is to find smart ways to save that will allow you the flexibility that fits your financial situation.

Interest checking accounts

One way to earn competitive interest rates while still having access to your money is to open an interest checking account. While many people tend to dismiss checking accounts as a way to save, many banks offer competitive rates on their interest checking accounts. Interest checking accounts allow you to spend your money freely with unlimited check writing while still earning interest if you satisfy certain requirements, such as using direct deposit or a debit card.

Keep in mind that these accounts may come with higher fees and minimum balance requirements, so be sure to compare accounts to find the best one for you. Additionally, keep your eyes open for promotional rates and products that many financial institutions offer.

Certificates of deposit

If having accessibility to your money is not your top priority, certificates of deposit (CDs) might be a good option for you. A CD is a deposit account that stores your money for a certain period of time and typically earns more interest than a savings account does. Since withdrawing money from your CD before the end of the term usually comes with high fees, some people use an investment strategy called "CD laddering."

By laddering your CDs, your money becomes available at different times because you use multiple CD accounts of varying terms. For example, say you deposit your money in CDs that mature in increments of three, six and twelve months. When the three-month account matures, you can move the money from that account to the six-month account and so forth. This way, you'll be able to access your savigs periodically and reinvest them. This strategy isn't for everyone's financial situation or investment personality, but it's certainly an option.

If you're simply looking to open a CD account, make sure to get the best rates by shopping around to see what different financial institutions are offering.

Now that we've detailed a few savings methods, tell us: What strategies do you use for flexible saving?

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All Comments

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Top Contributor
64 Contributions
39 People Helped

Helpful to 6 out of 9 people

Pay yourself first- Transfer money into savings automatically from your checking and you will never even notice it's gone.  If you have to, you can always borrow the money back from yourself but it's a great way to start saving.

Top Contributor
13 Contributions
47 People Helped

Helpful to 2 out of 2 people

Its Feb 2010 now. The highest interest rate you can get on a CD or money market is around 2.7% if you are lucky.

1 Contribution
0 People Helped

April 2011 and what janiesuper said over a year ago still stands.

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