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World Savings Day

World Savings Day is almost here – what are you saving for? Whether you have a short-term goal like stashing a little extra for holiday gifts or a long-term goal like buying a new home, there’s a savings account to help you get there. 

Accounts that hold your savings are known as savings vehicles. The best part about them is watching your savings grow. When you open an account and keep money in it, you are essentially lending money to a financial institution. When you lend money to a financial institution, they will pay you interest, meaning your money grows in value. There are many different options for accounts with varying interest rates.  

Savings Account 

  • You have less access to your money than with a checking account, so you’re not tempted to spend it. 
  • Most financial institutions pay interest, which compounds over time, on money deposited in this account. 

Money Market Account 

  • Savings account with check writing capabilities; you can write checks from this account but there may be restrictions. 
  • Tend to feature higher interest rates than standard savings accounts, and may require a higher minimum balance. 

Certificate of Deposit  

  • A deposit is held for a specific period (6 months, 9 months, 1 year, etc.). The financial institution pays interest to the CD holder on the deposit during that period. 
  • Tend to have higher interest rates than savings accounts, but you can access money only after the term of the CD has expired. If you withdraw money earlier, penalties will apply. 
  • These interest rates tend to be higher than those of savings accounts, but you can access the money only after the term of the CD has expired. If you take out money prior to that, there will be penalties. 

Online Savings Account 

  • Accounts are managed and funded primarily online (all deposits and transactions done electronically). 
  • Accounts tend to feature higher interest rates than standard savings accounts, but may not have all the options and services of a brick-and-mortar bank. 

Contact an Allegiance Banker today to discuss the best option to meet your financial goals.  

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