Maximize Your Savings With These Top Tricks
The average American has $4,830 tucked away in their savings account, reports CNBC. When you take into consideration all bank accounts and retirements savings, the typical household has $11,700. While some Americans are sitting on a tidy sum of cash, there are, however, 30% of homes with less than $1,000 to their names. Regardless of whether you’re a lifelong saver or just getting started, financial apps can help you budget better. But, what’s even more important, is managing your cash so you can maximize your savings.
Lock your cash in
Ideally, you should lock away any your cash into high interest savings accounts or certificates of deposit (CDS) accounts. These products usually state in their terms and conditions that you can’t make withdrawals for a set period of time without being penalized. As a result, these accounts typically offer higher interest rates, meaning you make more interest on your cash. On average, a standard savings account offers an interest rate of 0.19%. Whereas, CDS accounts have just peaked above 3% – their highest rate in a decade. A high interest savings account is most suitable for those with a small start-up sum and a CDS is ideal if you have a large amount to open your account with.
Set up a standing instruction
This Is Insider suggests that individuals save between 15 and 20% of their monthly income. Having a standing instruction set up is one of the easiest and most effective ways to move your cash from your checking account and they can help to boost your savings, too. By having a standing order in place, a set sum of cash will automatically be moved into your savings account on a regular basis. As there’s no need to manually move it, you won’t be tempted to spend the money on something else.
Switch to an online account
According to The Economist, America’s banks pay depositors less interest than online bank accounts do. CNBC state that online banks are currently in an ‘arms race’ to ensure that their rates are the best in order to secure the nation’s support and, ultimately, their money. These banks can offer better rates, sometimes as high as 1.60%, because they have fewer overheads to pay. Other than benefiting from better rates, savers also gain from being able to access their accounts 24/7, thus allowing you to monitor your savings whenever the mood takes you.
No matter whether you’re a novice saver or have years of savings behind you, there are ways to maximize your savings. By locking your cash into high interest savings accounts, having a standing order in place and switching to an online account, you can manage your savings better and boost your finances.