Opening a certificate of deposit (CD) is a sensible way to save for the future for your child, regardless of how old or how young he or she is. It's simply never too early or too late to start, and because the reasons to save are many, any little bit will likely help. But what is the best method of growing savings for your child?
One long-term way to save for the future that might work for your needs is a certificate of deposit (CD). CDs are a type of savings instrument offered by financial institutions across the country - including Ally Bank. Opening a certificate of deposit in trust for your child is a viable saving method for the following reasons:
There is no need for you to visit a bank in person to open a CD account. For example, with Ally Bank, you can open a CD, in trust for your child, online from the privacy of your home. Opening your account online also gives you a chance to see which banks offer the best rates. Online banks like Ally Bank generally offer higher interest rates than traditional banks according to Bankrate.com, and we help make managing your cash hassle-free.
- Your money grows automatically.
You don't have to monitor the progress of your CD on a daily basis (if you don't want to). Simply by leaving your money deposited, the bank will comply with the terms of the CD. With an Ally Bank CD, for example, the interest is compounded daily, so your balance grows faster.
- Predictable CDs are predictable.
The terms of your deposit agreement will state how much your CD will earn. At maturity, you can either renew your certificate of deposit or withdraw your funds.
- Higher Interest Rates
As with any savings product, a higher interest rate means more earnings over time. Longer-term CDs also generally have higher interest rates than their short-term counterparts. And, since saving for your child's future can be done over the span of many years, longer-term may be just what you need to get started.
To help you give your child a head start in life, Ally Bank has ways to help you save money - from the Ally Bank Online Savings Account to a full line of CDs and more. Get the scoop at AllyBank.com or call live, 24/7 support at 877-247-ALLY (2559) today.