Different Accounts - Different Incentives
Taking the time to do some research and figure out different ways to earn more money on your savings account makes sense and is beneficial in the long run. Why not start your child's financial education early?
Today’s interest rates for online bank accounts range from 1.09% - 2.25% depending on the minimum deposit amount and time frame. Online accounts are a great tool to teach children to get in the habit of saving while learning about compound interest, goals, etc.
Types of accounts
Savings Account allow for standard interest rate accrual while establishing solid emergency, project or vacation funds - pick your poison. With so many online accounts to choose from interest rates aren't capped at less than one percent.
Money Market Accounts generally require a large deposit and some patience. The monies in these accounts are used in money market deposit accounts which are used to invest in short term and liquid securities. Although this acts as both a savings and checking account, there are limits to the amount of withdrawals you can make.
Certificate of Deposit accounts have a set interest rate and a maturity date which allows for withdrawal or rollover at maturity. Accounts can be set up for a few months or up to five years.
As a planner, I tend to think long term. These accounts are great for starting your children's financial journey at your pace.
Online accounts are typically FDIC insured. Before opening an account do your due diligence and ensure that your money is secure.
Commentaires