Low rates shouldn't slow your savings

Don't let low rates stop your savings plan

As consumers struggle with steadily falling rates on CDs, money market and savings accounts, the chance to earn a sizable return on your cash can be a real challenge. Despite low interest rates, though, it's always a good time to start a savings plan.

Waiting will cost you

If you are young, record-low rates may make you wonder if you should even bother stashing away a certain amount each month. What's the difference if you start now or in two years, after rates have perhaps climbed? Well, it turns out that delaying saving can cost you big time. If you put aside $200 per month for 10 years at even 1 percent, you end up with about $25,245. Waiting two years to start, however, "costs" you more than $5,000.

Planning for the short term

Paying medical bills or dealing with unemployment is expensive. These unexpected events can be serious stress-inducers -- unless you're prepared. Determine how much money you will need for emergency expenses, and start saving that extra cushion of financial comfort.

Earning without working

Savings rates may be low, but some CDs, high-yield checking accounts and other products still offer competitive rates that will help you earn additional money. As you browse for new places to save and grow your money, remember that those low interest rates give you additional income.

From purchasing a car to planning for retirement, saving now will pay off down the road. Think of your long-term goals, and find the best savings rates that can help you reach them.

News alert Create a news alert for "savings"


Show Bankrate's community sharing policy
          Connect with us

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

Ask Dr. Don

How often to compound interest?

Dear Dr. Don, Is it better to have interest compounded on your money daily, monthly or quarterly? Which gives you the most for your money invested? Thanks, -- Jan Juxtapose Dear Jan, With all else being equal, the more... Read more

Partner Center

Connect with us