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Savings Guide 2006

Savvy savers

  There's more to saving than stuffing your extra cash in a mattress.
Savings: The next big thing
   
Money market accounts 529 accounts
Christmas/vacation clubs Savings bonds
Money market mutual funds Treasuries
 

Pros
Cons
Who it's for
Comparison
 
 
 
 
 
 
 
 
 
 

The ideal customer for the traditional savings account is someone who wants to save but realizes he could need that money instantly at any time.

Think young, cash-strapped and no safety net. As you save that recommended three-to-six-months' living expenses, you can also access it any time you have to pay medical bills, make emergency car repairs or replace the refrigerator.

It's also a good vehicle for older, more experienced consumers with special needs. Like the guy who just saved a bundle raising his insurance deductibles to $1,000. Now he parks $1,000 in an account he can raid at a moment's notice and he's covered.

Savings accounts can also act as a temporary parking spot for money you're accumulating to invest while you make more long-term strategy decisions. But, even in the best-case scenario, it's not the ideal place to leave large sums of money long term, because rates will usually just about cover inflation.

Trying to figure out which options best match your savings strategy? Here are several key points to compare and contrast at a glance.

 
minimal usually none yes no no complete
$1,000 - $50,000 yes no no no liberal
minimal usually 0 yes no no complete
$500 - $5,000 often yes no yes partial
$500 - $5,000 usually yes no no with penalty
minimal usually 0 no yes yes highly restricted
approx $25 yes yes no no restricted
minimum $1,000 yes yes no no restricted

 

Select:

Create a news alert for "savings" -- Posted: Oct. 1, 2006


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