So, you’re on your own, you’re making money, and you’re starting to save a decent amount. Most people stop here. “I’ll put it in my savings account; it’ll get a little interest, and we’ll be good to go.” But that’s not how the richest celebrities at locations like http://richestcelebrities.bio have made all of the cash over the years. They have looked at a lot of their options and, in the end, made great investment decisions as to how they can get ahead of everything.
Now, if you go to your bank, or to their website, you’ll see a whole bunch of other places to put your money. Most people don’t want to bother with these, but, if you take the time to learn about them, they really are worthwhile.
CD’s: CD’s, or Certificates of Deposit, are restricted accounts that you deposit a certain amount of money in for a specific amount of time. My bank offers them for as short as 3 months to as long as 60 months (5 years). CD’s require you to keep the money in for that specified amount of time or you face a penalty. Some banks offer what are called “no penalty” short term CD’s, where if you have to, you can remove money from the account early without having to pay a fee; only losing the extra interest you may have gained by keeping it in. One thing I never realized until I started using these: Most banks will just roll over the money into the same type of certificate account after maturity. You have to contact the bank to have them move the money into a different account within a certain amount of time (usually a week) without getting a penalty.
Money Market Account: This is probably my favorite to use, because of the flexibility it provides. They require a minimum deposit, usually around $500, and often have a similar interest rate to short term CD’s. The interest rate fluctuates with the economy and is reevaluated on a regular basis. Unlike a CD, you can take from this account whenever you need to, and it’s fine unless you go below the required minimum. Basically, it’s an amped-up savings account.
Vacation/Christmas Club Accounts: Saving for Christmas presents or Vacation? These accounts allow you put a certain amount of money in monthly, and release the funds to a specified account on a certain date, usually vacation accounts are in April and Christmas accounts are in October. Like a CD, you get a penalty for early removal, but these are good ways to save up all year for times that can be more expensive.
IRA’s and other ‘specific savings’ accounts: Individual retirement accounts, or IRA’s, are, obviously, for the purpose of saving for one’s retirement. Some banks offer other kinds of savings accounts that are similarly earmarked. These can be certificate accounts, like CD’s, or they can be savings accounts, and work the same. The primary difference is you can see exactly what that is meant for.