There’s lots of options when it comes to saving money. Below we outline savings accounts, money market accounts and cash management accounts.
While it might be convenient to keep all your money in checking, you may miss out on the opportunity to earn more interest and build your rainy day fund.
Choose a savings account to reach your financial milestones and peace of mind.
It’s easier than ever to compare online savings accounts thanks to Fiona. Try it out below:
Savings Accounts — Earn More Interest
According to the Federal Deposit Insurance Corp (FDIC), the average annual percentage yield (APY) on a checking account is approximately .08%. The APY represents what percent of your balance you’ll earn in interest every year. With an APY of .06%, an initial $20,000 balance would only be worth $20,016.01 after one year, and after five years would merely be $20,080.16 (if interest rates remain constant).
High yield savings accounts, however, can offer APYs of 2%. That same initial $20,000 balance in a high yield savings account worth $20,400 after one year, and $22,081.62 after five years (if interest rates remain constant).
Use online financial recommendation engines like Fiona to search and compare between available online offerings to find savings accounts with high APYs. Digital platforms provide easy-to-use customer service solutions available to users 24/7, helping to resolve your financial questions.
To easily explore personalized online savings accounts on Fiona, click below.
Money Market Accounts (MMA) — Safe Liquid Savings
In money market mutual funds, your money will be invested in short-term, low-risk investments. These accounts are very liquid and will provide you more flexibility than a high yield savings account. With an MMA, you can convert your investment to cash at any time.
However, MMAs often have higher balance minimums, requiring users to invest several thousand dollars in order to open an account. If you’re looking to start small, another savings account might offer more flexibility.
Cash Management Accounts (CMAs) — A Hybrid Solution
With CMAs, consumers can get the best of both worlds and merge the benefits of a checking and savings account. Consumers benefit from higher APYs and get access to funds via a debit card / ATM. Users can also write and deposit checks from the account — through a mobile app, you can take a picture of the check and deposit it online, without visiting a physical location.
CMAs allow you to multitask by earning interest, making payments and managing cash.
On Fiona, you can search for CMAs that include check-writing and other perks that help you manage your money better. Compare CMAs side by side against other online savings accounts with real-time rates that reflect the actual APY you would receive.