Where’s the Safest Place to Keep Your Money?
The following was submitted by a guest contributor
For obvious reasons, nobody wants to lose their money under any circumstances. But if the recent economic carnage (remember Bear Stearns?) and the ongoing turmoil in the Eurozone is anything to go by, the prospect of waking up to find that your bank has collapsed isn’t out of the realm of possibility. You should concern yourself with protecting your savings and maximizing the growth of these funds. There are various options that can result in gains each and every year and, fortunately, anyone can take advantage of these solutions no matter how much money they hold in their name. And while it may be tempting to just lodge your savings under the mattress at home, this is the last thing you should do because that money will not grow at all! So if you want to diversify where you invest to protect your interests, check out these options.
(Relatively) Safe Places for Your Money
Here are some of the safest places to keep money from We Know Money:
High-Yield, Low-Fee Savings Accounts
Unfortunately, most financial institutions keep their interest rates low and their fees high for savings accounts. The average bank hands out interest rates below one percent. This story is completely different for fees and penalties though. In fact, you could pay $35 for overdrawing their account a single time. Luckily, various financial institutions still offer accounts with high yields and low or non-existent fees. For peace of mind, just make sure that all of the funds in an account are insured by the FDIC up to a certain amount too.
Dividends and Investments
Investing in stocks and other holds does come with an inherent degree of risk. Still, a cautious and savvy investor can easily turn a profit from the markets. Dividends are payments made on a quarterly or annual basis by companies to their shareholders. Some investors receive thousands of dollars in these payments each year. Of course, the amount earned depends upon the company’s dividend and how many shares you own. The key to success is to build up a portfolio over time and choose stocks that will keep their dividends for the years to come.
High-Yield Certificates of Deposit
Certificates of Deposit (CDs) work like savings accounts, but the owner locks themselves into a certain investment period. Of course, this can range from three months to ten years based upon a person’s preference. The money cannot be touched by the owner during this time, but it earns a specific interest rate during that period. A higher initial deposit usually results in a higher interest rate. By the end of the term, an individual will receive the original balance and all earned interest. Plus, these accounts are insured by the FDIC.
Safety Deposit Box
Sadly, this option does not come with an interest rate or any real way to profit from the funds. Not everyone wants to profit from their savings though. Many simply want to set aside some money they know is secure and protected. In most cases, a bank is likely to feature safety deposit boxes that account owners can rent for an extended period of time. With this option, a person can stick their money in one of these boxes and know that it is protected in a safe at that bank. The safety deposit box costs money but offers definite protection.
In the end, there are plenty of great options for keeping your money safe and protected. Most of the previously mentioned solutions allow you to earn a return on savings too. Some of them are even insured by the FDIC, which means you technically cannot lose their money. Without a doubt, a saver needs to take advantage of the options that suit their needs best. Each and every situation is different, so one solution may not always work for another individual. It is always recommended that a person chooses an option that fits their needs best.