Are you saving toward a specific purchase or investment?
Yes: You may already know the exact amount you’re looking to save. This is often the case for people saving for a down payment on a new home. If you already have a savings total and timeframe in mind, simple math will tell you how much to save each month.
Not yet: If saving instead for an emergency fund or the future, take a close look at your budget to determine how much you can comfortably afford to allocate to savings. This is also an excellent time to refine or tighten your budget and adjust your spending patterns.
Will you need anytime access to your funds?
Yes: Consider a money market or savings account. With either account, you may transfer or withdraw funds up to 6 times per month without incurring a fee.
No: If you can afford to tie up your money for a longer period of time, you might also consider opening a CD or even multiple CDs. Please keep in mind that penalties will apply if you withdraw your CD funds in advance of it maturing. CDs offer you the opportunity to fix your rate and your earnings.
Which is the best type of account for you?
Traditional savings: If you intend to build your savings over time through periodic deposits, then you’ll want to choose a money market or savings account. Plus, with these accounts, your money will be accessible to you at any time. Direct deposit through your employer and automated transfers are two great way to keep your savings goals on track through regular deposits of a set amount.
Certificates of deposit: If you already have a lump sum of money saved up that you won’t need immediate access to, you may want to consider a CD rather than a money market or savings account. CDs typically offer you the opportunity to earn a better rate than those available on traditional savings accounts.