When planning to build up a fund for emergencies, unexpected expenses or lean financial times, it's important to consider the best way to save. You may decide to place your money into a CD, savings account or another type of savings instrument.
Your first critical savings goal is, ideally, to have emergency cash on hand. Preferably, this should equal about three to six months of your expenses and may even take priority over eliminating debt, depending on your situation. Although paying down debt can save substantial amounts of interest over time, it may not provide the safety net you need.
On the other hand, you might consider a "some now, the rest later" approach, where you put aside a small emergency fund in the short term, typically in something that gives you easy access to your money, like a Money Market Account from Ally Bank. Maybe you start with $500 for now, then concentrate on paying down debt. Once that's out of the way, return to your emergency fund and stay focused on building that up to equal three to six months' living expenses.
Once sufficient money has been funneled into an emergency fund, you might consider some longer-term strategies for savings. Ally Bank offers Certificates of Deposit (CDs) with rates that are consistently among the most competitive in the country. You can open and fund our CDs with any amount.
For those who are not yet prepared to place their funds into a CD, savings account rates are also quite competitive with Ally Bank. Plus, our Online Savings Account helps you avoid the early withdrawal penalty incurred with some CDs. This type of account can be a solid savings instrument, keeping funds available to be used in the short term.
As with all FDIC-member banks', your deposits are insured by the FDIC up to the maximum allowed by law. Visit Allybank.com to learn more, or speak with live, 24/7 customer service at 877-247-ALLY (2559) today.
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