The hard earned money which takes form of personal savings is considered precious by almost everyone. People tend to put their savings into bank accounts that offer high interest rates and carry minimum to low risk.
Even though using your savings to invest in high risk environments such stocks will yield more profit but the risk factor deters a lot of people. By putting the savings into bank accounts that provide interest let the money grow slowly without much risk.
There are different types of savings accounts readily available for the general public to invest depending upon their choice and accessibility. Online banking has also increased the options of savings accounts. Here are some of the accounts which can be fruitful for your savings with little or no risk attached.
CD – Certificates of Deposits:
Certificates of Deposits are one of the safest options to put your savings in. They are readily available at almost all the credit unions and banks. Certificates of Deposits are insured from Federal Deposit Insurance Corporation (FDIC) but they offer relatively higher interest rates especially on longer and larger savings deposits.
The highlight of CD is that it binds the investor to keep the money in CD for a long time, which will be specified at the beginning of the tenure. If the agreement is broken, a penalty will be applied which results in the investor losing interest of almost 3 months and s/he will also be assessed for breaching the agreement.
The most popular kind of CD matures in 6 months to 1 year. The interest earned in this specified time period is added into the Certificates of Deposits when it matures and can be renewed also according to the wish of the investor.
Credit unions and banks offer saving accounts to their employees. The employees can put their money into a savings account, which is backed up by the FDIC for a specified time. There are certain restrictions, which are implemented when the savings accounts are applied for such as a certain number of permitted transactions and a service fee.
The interest rate accentuated with savings account is low compared to the other options and the money in it cannot be withdrawn via checks or ATM.
Saving accounts with high-yield:
The high yielding savings accounts are the type of accounts which come under complete FDIC protection and they earn an interest rate higher than the standard savings account.
The reason why they are different from savings accounts is that there is a large amount of deposit required to open the account and the access is limited. These kinds of accounts are offered to only valuable customers of the bank. Online banking for high-yield savings accounts is also available now.
Treasury notes and bills:
Treasury notes and bills issued by the government of the United States are considered one of the safest investment options. The US government notes and bills are also called treasuries and they are fully supported by the government.
One of the most unique attributes of treasuries is that they are exempted from any kind of taxes imposed by the state or federal government. They are readily available for different maturity periods of time.
The treasury notes are sold at a discounted rate and when the maturity time comes, their worth is equivalent to their actual worth. The treasury notes and bills are available in the market for as low as $100.
Bond is one of the low risk investment options, which is issued by states, municipalities, companies and the government to fund their different projects. When a bond is purchased, the money is entitled to one of the entities and in response it pays interest till the time of bond maturity.
Bonds have a fixed rate of interest and are also issued for a specific timeframe.
Investing your savings into low interest options is a wise decision to gain return for a long period of time but the pace will be slow. It is always advised to do your research before investing in any of the savings accounts in order to save yourself from losing all the money.