Tips For Securing The Best Rate Of Return For Your Savings Accounts
A highly important aspect of personal finances is your personal savings. You need savings for a variety of different reasons, and that grouped with a need for diversity means that your savings needs to be in different accounts and investment vehicles. Continue reading to find out some helpful tips for securing the best rate of return for your savings accounts.
Make sure you shop around for the best interest rates and terms on savings accounts and money market accounts. Traditionally, these accounts don't pay much of an interest rate, but in today's world, online banks have actually produced some pretty high interest rates on savings accounts. This has pushed certain traditional banks to compete with them to a degree. You definitely must have money in one of these types of savings accounts because you need an emergency fund that is liquid.
Make sure you consider CD's. While these investment vehicles lock your money for a certain period of time of your choice, they are very safe and secure investments. There is no volatility like with stocks and mutual funds. They are all on a fixed rate of return.
Buying bonds and annuities is also a good option. They are also fixed rate of return investment vehicles, and they're historically very profitable. They are a great asset to any portfolio.
Mutual funds are a great option when you want to benefit from historically higher rates of returns in the stock market. There are so many different options to choose from, and you have much to consider.
Hedge funds are also an option. Right before the recession, hedge funds were at an all-time high, banking on businesses with sinking stock prices. This is one way to play your options when it comes to the stock market.
Make sure you also take advantage of any tax breaks for certain accounts like IRA's and educational savings plans. Also, take advantage of your 401k if your employer provides one. These plans come with tax advantages, and the 401k plan comes with matching, which is basically free money. This means that you automatically start out with a astronomical rate of return. This is why you should take advantage of these types of programs.
Make sure you talk to a financial planner or account manager if you need extra assistance with financial planning. This costs money, but depending on your situation, it might be the best option for you. You have to do what is best, and make sure that it doesn't affect your rate of return too badly. That is the key.
It is very important that you take care of your savings for many different reasons. You want the highest rate of return possible, so that your savings grows exponentially over the years. This can pose a challenge, as some savings vehicles that are less risky don't provide as high of a rate of return. Therefore, you must choose wisely, and remember the tips you've read here as you look further into your options.
