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Low rates shouldn’t slow your savings

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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.

Written by
David McMillin
Contributing writer
David McMillin is a contributing writer for Bankrate and covers topics like credit cards, mortgages, banking, taxes and travel. David's goal is to help readers figure out how to save more and stress less.