Finding the right savings account can be a challenge for anyone. The best way to do this is to be aware of exactly what you should be looking for. The following is a sponsored posts from ForexTraders.com
The basic concept of building wealth is not very difficult to understand. When deduced to its most basic elements, finance is basically composed of two items—income and expenses. The goal of every company in the world is to increase income and reduce expenses. Personal finance is not much different. The way for a person to build substantial wealth over the long-term is to steadily increase income, while keeping expenses at bay. Unfortunately, this is easier said than done.
Government statistics tell us that the large majority of Americans have less than 3 months of personal savings. The reason is simple. As most people make money—increased income—they, in turn, increase their spending proportionately. This means the spread between what they make and what they spend never really widens, and it is this gap between income and expenses that is essential to building real wealth for an individual or a company.
It is common knowledge that a savings account is essential for building wealth. In this article, we are going to identify several of the most common types of savings accounts that are available to people, but before we do that, let’s briefly examine how a person should save his or her money.
Personal finance experts often suggest to treat saving money the same as paying a bill. For example, in a budget, a list of expenses includes items such as mortgage payment, electric bill, water bill, etc. One of the most effective ways to get into the habit of saving money is to treat savings as a bill. Therefore, add “Savings†to your list of bills each month. When you sit down to pay bills each month, pay your savings account the same way that you pay the electricity bill. This helps form the habit of always saving a certain amount of money each month. Once you begin to form this habit, the next thing to consider is where you will place this money.
Bank Savings Account
This is the most common type of savings account. A personal savings account can generally be opened free of charge at your local bank. This is the most liquid type of savings account, which means that you may withdrawal your funds at any time. Today, most banks have ATM’s, which means you have literal 24 hour access to your funds. The government also insures savings account deposits through the Federal Deposit Insurance Corporation. The government does not insure risky investments such online forex trading. Due to the extreme liquidity of this type of savings account, it does offer the lowest yield on average.
Money Market Account
A money market account is also offered through your local banking institution. This type of account is considered extremely safe and subject to little risk. A money market account, however, is not as liquid as a standard savings account, which means that you cannot withdrawal money as easily. Generally, it takes 1 to 2 business days for money to be withdrawn. These types of accounts also offer a slightly higher interest rate than a standard savings account.
Certificate of Deposit
CD’s have long been a favorite among investors because they offer a much higher interest rate than a standard savings account or money market account. However, there are several limitations with CD’s. First of all, similar to the forexHYPERLINK “http://www.forextraders.com/forex-broker-reviews.html†brokers, there is always a minimum deposit. Second of all, funds are not as liquid, which means they cannot be withdrawn without paying a penalty fee. When you deposit money into a CD, it is for a predetermined period of time, generally ranging from 1 month to several years. If you want to withdrawal money before the maturity date, then a small fee will have to be paid.
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