There’s no shortage of resources telling you how to save money, but only you know which strategy will work for your lifestyle. Following are some questions to ask yourself as you begin to save.
- What are your goals? Invest some time and really think about what you want from your future, and you’re more likely to make better financial decisions for yourself and others in your care. Generally speaking, CDs can be a sound way to reach savings goals that are relatively short-term—say, five years down the road or less.
- Do you have an emergency fund? Putting roughly nine to 12 months’ living expenses away for a rainy day is simply a responsible financial decision. A CD may or may not be the best place to put your emergency fund. Typically, if you withdraw your funds before the CD matures, you will incur an early withdrawal penalty. However, with the Ally Bank No Penalty CD you can withdraw all your money, including interest earned, without penalty, any time after the first six days following the date you fund your CD.
- Do you want to add money to your balance on a regular basis? With most CDs, you can’t add money to your account balance during the CD term. Depending on your goals, it might make sense to start saving with an Ally Bank Money Market Account or an Ally Bank Online Savings Account—both of which you can open and fund with any amount. You can earn interest on a balance of any size while you keep adding regular deposits, and later deposit money from that account into a CD.
- How much do you need, and when do you want to reach your goal? Determine a timeline for your goals. For example, if your goal is to save for a down payment on a house, you should figure out how much you want to save. If you’re starting out with some money already in hand, you might consider putting it into a shorter-term CD where it can earn interest right away—for three or six months. Then you can continue to save and add to the CD when it matures, rolling that amount into a new CD and so on. Knowing your timeline and how much you can contribute on a regular basis toward your goal is important.
Review your savings goals, compare rates, and determine whether saving with CDs is right for you. At Ally Bank, we offer our great rates to everyone and you can open and fund an account with any amount. Visit Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.
Ally Bank, Member FDIC