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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
 
 
 
 
 
 
 
 
 

Just about everybody, says Douglas Borkowski, director of the Financial Counseling Clinic at Iowa State University. You get a rate of return closer to a stock-type investment without the stock-market-level risk. Because it's less liquid (and could return some decent interest), it's most effective for those needs that are a few years away, rather than the always-available emergency fund or saving for that big-screen TV you want to buy in the next few months.

That means the couple saving for a house in two or three years might be able to get a nice little dash of interest on their nest egg. And a college student who doesn't have a lot of extra cash can start putting a little away for after-college life.

Like CDs, you can also park money market mutual funds inside a tax-deferred account for retirement or college savings. And they continue to be popular with investors, as the low-risk, liquid part of a balanced financial strategy.

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:

-- Posted: Oct. 1, 2006


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