The journey of a thousand miles begins with a single step, as does the journey to a successful savings plan. Join us as we walk through one of the most basic parts of setting up a successful savings program.
- Step 1: Find a savings product that suits your needs. Typically, you're going to want to choose between a number of savings products available at FDIC-insured institutions, such as savings accounts, money market accounts, or certificates of deposit (CDs). However, if your savings needs are relatively flexible, this decision may be directed, in part, by the rates and requirements for each account.
- Step 2: Find the highest rate. To quickly compare offers and find the highest rate, check convenient online rate tables. These tables allow you to compare rates on similar savings products at one glance. Securing the highest rate should be a top priority when choosing any savings product. There is simply no reason to settle for a lower rate when there are higher ones available.
- Step 3: Open your savings product. This can be quick and simple. To complete most applications, you will be asked to provide information to verify your identity. While each institution can have different requirements, they tend to include the following: a social security or tax I.D. number, U.S.-issued driver's license or I.D. card and a legal U.S. address.
- Step 4: Deposit funds into your new savings product upon approval. With a number of online banks, a valid U.S.-based checking account is linked to the online account for easy deposits and transfers; likewise, for many online divisions of traditional banks, an existing checking account may also be a requirement in order to make the initial deposit. Also, some institutions may offer bonuses for having multiple accounts.
- Step 5: Deposit funds regularly. While this account will continue to grow slowly and surely, a truly successful savings program requires routine contributions. One way to ensure this happens is to schedule automatic transfers. For instance, a regularly scheduled $50 transfer from your checking account to your savings account each month will yield $600 a year plus any interest you may earn along the way. Consider selecting CDs that will allow you to add funds during the term. If you use a product that does not allow additional deposits (such as a regular CD), you can still use automatic transfers to accumulate a lump sum to invest later.
Continually checking for the best product that fits your needs should help ensure you are getting the most out of your savings product. Always keep your eyes open for teaser rates and promotional offers.
Source: Informa Research Services
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