You've put aside $1,000 to save. But you're unsure where to stash your cash. Maybe you're trying to decide between a money market account and a mutual fund, looking to find a way to protect and grow your savings. First, decide what your savings goals are. If your saving goals are short-term, say, next summer's vacation, then mutual funds, which are not FDIC-insured and generally are more subject to the ups and downs of the financial markets, may not the best choice. After all, you don't want to see part of your money evaporate the week before you were planning to buy those tickets to Cancun. An FDIC-insured money market account, on the other hand, is a secure choice to meet your short-term savings goals. And the right account should pay a competitive rate of return.
Financial experts say money market accounts also can be a smart location for your emergency fund, as long as the accounts make it easy to withdraw money without penalty (within federal transaction limits). "You need to have a cash reserve account that's not tied up," says James Holtzman, a certified financial planner with Legend Financial Advisors, Inc., in Pittsburgh. "Build up that reserve account first. That's always the right answer if you have a little money to put aside."
If you're sure you won't need your money until a certain date, CDs are a good intermediate option. They usually pay higher rates than money market accounts, as long as you don't make an early withdrawal. That said, the Ally Bank No Penalty CD may be a good option for you if you’re not sure. With the Ally Bank No Penalty CD, you get a CD that allows you to withdraw all your money, including interest earned, without any penalty, any time after the first six days following the date you fund your account.
Whatever your savings goals, Ally Bank is here to help. Explore our savings products and more at Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.
Ally Bank, Member FDIC