investing in your future
Where Can You Put Your Savings?
There are several types of savings options to choose from. One important factor to consider when selecting where to put your money is the rate of interest they provide. Which of these savings options is likely to offer the highest rate of interest?
- An interest-bearing checking account at a bank or credit union
- A passbook savings account at a credit union, bank, or savings and loan
- An insured certificate of deposit
“C” is correct. Checking accounts usually earn less interest than savings accounts. But both these types of accounts allow you to withdraw your funds without paying a penalty fee. Certificates of deposit or “CDs” generally provide a higher rate of interest, but require you to keep your money in the account for a specific time period (3 months to 5 years). No matter which option you choose, make sure your financial institution is FDIC insured. This guarantees that up to $250,000 of your funds will be safe even if the bank fails.