Savings Accounts
Even if you've not fully paid off your consumer debt, it's still a good idea to set aside some of your monthly surplus for building a savings reserve. Make it a priority to set aside three to six months living expenses for emergencies. We suggest $10,000 as a starting point, but it's your call. After that, you may want to begin accumulating funds for a major purchase you are planning (such as a car).
It's not often that we have to completely re-evaluate basic strategies we've offered to readers. But recent events in the ultra short-term bond world are causing us to do exactly that.
Trying to save money can be a frustrating experience. No sooner do you get a little set aside for a rainy day and the rainy day arrives, knocking you back to square one. If you're tired of running in place on the savings treadmill, these three techniques can give you a boost.
It's a lesson we often only recognize in hindsight: once the emergency strikes, it's too late to prepare. This first-hand account illustrates why an emergency fund is one of the cornerstones of a healthy financial foundation.
How much money should you have in emergency savings? There's no one-size-fits-all answer, but these guidelines will help you determine the right amount for your situation...
To maximize your savings, it's important to match the correct savings tool with your expected time frame. These six tools offer a solution for every savings need.
Online savings accounts from ING and other providers have captured the attention of many prospective savers. How do they compare to the traditional money market funds that SMI has long recommended for your emergency fund?
Paying yourself last, out of your leftovers, is the most common reason people fail to meet their savings goals. Try these two paths to automated savings, and watch your saving habits turn around in no time.
The yield curve can tell us quite a bit about the economy, inflation, and interest rates. So what is the yield curve, and how do you go about interpreting it? We demonstrate why, in this case, a picture is worth 10,000 words.
The frustration of savings setbacks while trying to build an adequate emergency savings fund leaves some savers feeling like they'll never be able to move on to "real" investing. We review the rationale — and likely time involved — in keeping these priorities in order.
Think the experts know which way interest rates will go next? Guess again.
How would you like to earn a 15% return on your savings this year? That's right, the same savings currently earning less than 4% in your money market account. We explain how this opportunity for big returns exists year after year.
If you're able to leave your savings invested for a while, you can afford to take on slightly more risk in pursuit of higher yields. In that case, short-term bond funds are an intriguing option. (For saving goals that are 2-3 years away.)
When saving for a goal that is a few years away, it pays to look beyond money market funds. Ultra-short term, short term, and GNMA bond funds are all useful savings tools for goals of varying lengths. Learn how to match your time frame with the appropriate savings product. (For saving goals that are 4-5 years away.)
The old tax adage says, "It's not what you earn, but what you keep." That's certainly true when it comes to choosing the right savings vehicle, particularly if you're a saver in a high tax bracket. Thankfully there's a simple formula that can guide you to the best products for your situation.
55 million Americans own them, so how complicated can they be? In the case of U.S. Savings Bonds, the answer is — plenty.
Investors often believe the returns from their bond funds are lower than they actually are. The cause of this confusion is usually their reinvested monthly dividends. We walk through an example illustrating how this dividend reinvesting process works.
Since most money market funds invest in the same kinds of securities, the interest income they earn for their shareholders tends to be similar. The differences in the returns investors receive are primarily due to a fund's operating costs. If your fund made our list of stinkers, it's time to consider a change.
How big a deal is the declining national savings rate? We examine this hotly debated question, and conclude there are four inescapable facts we must face regardless of the answer.
The use of online banking has exploded in recent years. What's behind the surge in client interest, and more importantly, does online banking offer anything you should be interested in?
How do online-only banks provide better yields for savers, and should you be concerned about safety risks when banking online? These are among the issues considered in part 2 of this series on online banking.
With interest rates creeping higher and savings yields moving back towards "normal," it might be tempting to think it doesn't make much difference which specific savings vehicle you choose. A closer look at the data reveals that isn't exactly the case.
With interest rates so low in recent years, it didn't make much difference where you held your savings. With eight Federal Reserve rate hikes now behind us, money market funds are starting to reassert themselves vs. other savings options. Here's a primer on money market funds and why they're usually the best destination for your emergency fund savings.
Income-producing investments can be tricky to evaluate. In addition to the gain or loss realized when you sell the investment, you need to account for the income earned while you held it. Only in combining these two elements do you arrive at a total return figure that tells the whole story.
Short-term interest rates have risen six times already since mid-2004, and are likely to continue higher. With each increase, money market funds are reclaiming their usual performance edge over bank savings accounts and CDs. If you've never looked beyond your local bank for short-term savings before, you'll likely be surprised at what's available and how easy it is to make the transition.
SMI regularly advocates using a money market fund for your emergency savings account. But what does a money market fund actually consist of? We've got the details.
Money market funds are usually the best saving deal for your emergency fund, but some people hesitate to use them because they don't seem as safe as "money in the bank." We run through the safety considerations one at a time, building the case for these superior savings vehicles.
Taxes play a significant role in the ultimate profitability of most investments, and short-term savings vehicles are no different. But how do you compare the yields offered by products like Treasury bills, which are exempt from state and local tax, with savings products whose yields are fully taxable? We explain how, and offer our monthly analysis of where the best deals are.
Having an emergency fund isn't just smart preventative medicine, it can also turn a profit for you. Find out how a few simple tweaks to your cash management practices can earn thousands of dollars over a lifetime.
Significant changes are being made this month to how new EE government savings bonds will calculate interest. Unfortunately, they're not changes for the better, at least from a buyer's perspective.
There's a new type of CD competing for your savings dollar. This new breed promises flexibility and the chance for higher yields as interest rates rise. But their flexibility comes at a cost. Are they worth it?
The uncertainty of future interest rate moves makes it difficult to know what the best savings strategies are. Lock in today's rates? Stay liquid and hope for future rate increases? One strategy that helps eliminate some of the guesswork for savers is building a CD ladder. We explain why, and how, inside.
What if you could earn a competitive yield on your savings dollars and help others with that money at the same time? Sounds like a win-win. It turns out that you can, through the Self-Help Credit Union.
Avoiding bad companies isn't the only way to approach being a socially responsible investor. Here are a sampling of community development banks that allow you to approach the issue from the opposite side — by rewarding the good guys.
What is a stable value fund, and is it a good choice within my company retirement plan?
