What's the best type of savings account for me to be earning some return, but still have some money liquid and available?

I have next to nothing in terms of money, and am coming up with a tangible plan to get out of debt and save up. I have an old credit union account with very little in it, that earns only .5% annually, and two money markets that earn basically nothing, but are more liquid. I'd like to move that credit union account to something more tangible, and consolidate some money in one account that has a good, safe return. Then maybe just keep the money market open because it's an easy, immediate transfer to and from my checking account. Thank you!

Posted November 12, 2013 · 151 views · people have this question too

Answers

  • 1 out of 1 person found this answer helpful

    AIF®, CFP®, EA, MBA Alexandria, VA

    This question reflects one of the harsh realities of today's economic environment.  There are no safe, liquid accounts that provide much return.  Here are some things to consider though that might help.

    1. A CD Ladder.  Divide your funds into 5 parts (You could pick a different number).  Deposit the divided funds in CD's that mature at 1, 2, 3, 4, and 5 years.  When your 1 year CD matures, deposit it in a new 5 year CD and repeat as CDs mature.  The longer maturity CDs will provide more return.  If you need money now, you could cash in the one year CD without losing too much in interest penalties.
    2. CD Ladder with Money Market Fund or Savings Account.  You could increase your liquidity by combining a CD Ladder with a portion of your funds deposited in a Mooney Market Fund or Savings Account.  You'll probably give up some yield to do this.
    3. Short-term Bond Fund.  Now you are accepting risk and the value of your investment could go down.  But, short-term bond funds generally provide more income than the above options.  You could also combine this with numbers 1 or 2 above.
    4. Pay down debt.  You mention you have debt.  If you have enough funds to handle an emergency (like you lose your job or get hurt), then you might consider using the excess funds to pay-down debt.  If you pay off a 10% credit card that is the same as earning 10% on your money...risk free. 

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    Advisors offer free consultations to determine if you're a good fit for one another. Providing more information in the consultation request will help advisors have a better sense of what you're looking for. The advisor will contact you via email and set up a time to meet. Depending on the advisor, and your preferences, this could be an in-person or online meeting. You are under no obligation to engage them after meeting with them.
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  • 0 out of 0 people found this answer helpful

    Farmington, CT

    in addition to what Kurt said, since you are looking for a savings account you can explore bankrate.com for FDIC insured fully liquid MMK funds. I am not affiliated with Bank rate just sharing personal opinion.

    Here is the link. http://www.bankrate.com/funnel/savings/savings-results.aspx

    Best of Luck

    Sincerely

    Michael Mezheritskiy

    www.VisionaryWealthMgmt.com

    Was this a helpful answer?

    Advisors offer free consultations to determine if you're a good fit for one another. Providing more information in the consultation request will help advisors have a better sense of what you're looking for. The advisor will contact you via email and set up a time to meet. Depending on the advisor, and your preferences, this could be an in-person or online meeting. You are under no obligation to engage them after meeting with them.
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