Different types of savings vehicles allow you to access your money and earn interest too. See which is best for you.
Saving is the first step in a financial plan, and there are several ways you can save money, earn more money with that money through interest and still have access to it should you need it. In this chapter, you'll learn how much money you can earn through annual and compound interest and how interest rates are set. Then we'll look at the differences between savings accounts, money market accounts and money market funds.
What you can expect to learn from this chapter:
- Develop a savings plan
The difference between annual interest and compound interest is explained.
- How interest rates are determined
We hear a lot of talk about interest rates. This section will explain how the Federal Reserve sets rates and how those rates affect you.
- Savings accounts
We lay out the differences between passbook and statement savings accounts, and list the benefits and uses of such accounts.
- Money market accounts
The details on money market accounts, or MMAs, are spelled out.
- Money market funds
Find out how money market funds differ from MMAs.