A saving strategy that doesn’t feature a savings account might seem counterintuitive, like trying to get in shape without a gym membership. But you don’t need elaborate equipment to break a sweat, and you don’t have to depend on your savings account to boost your nest egg.
With low interest rates, you won’t see significant growth in your account, so the following strategies could prove to be much more effective.
1. Use certificates of deposit to set aside cash
The benefits of certificates of deposit may not be obvious right away. To some people, CDs might even sound like a borderline scam: You’re telling me my money is locked away for up to five years, and if I want to withdraw it early, I’ll be charged a fee?
That is correct. But look at it this way: If you want to save $1,000 for an island getaway, it’s best to shove that money to the side and forget about it. If you keep that cash in a standard savings account, you might dip into it when your checking account is running low. Put it in a CD, and it will be there when you need it.continue reading »