Stashing Your Cash

July 28th, 2011 | Investing, Money, money management techniques, Personal Finance, saving

stashcash If you want to access your money quickly, where do you put it? Where do you hide your emergency fund, in a cookie jar, a safe or in the bank? Knowing where to stash your cash is vitally important, and so here are some of the options that are available to you for this very purpose:

1 - Checking and Savings Accounts - Savings spend a lot of time simply sitting in checking accounts because this is often perceived to be the easiest available option. It is not really a good idea, though, if you think about it. Savings should be completely segregated from your normal day to day money for spending for a number of reasons, including but not limited to the fact that it is much too easy to dip into your saving money if you keep it this easy to access. You will not earn any interest in a checking account either, in general, meaning that a non checking account is going to be the better option for you to pursue.

Savings accounts, just like checking accounts, are safe as long as the bank is insured by the FDIC and savings accounts tend to pay higher interest rates in comparison to checking accounts. This is a good place for you to park your savings but only as much as you might need in a short term emergency situation because savings account interest rates and inflation do not mingle well together and you could end up losing money if not careful.

2 - Money Market Accounts - These money market deposit accounts are offered by most banking institutions and they are also insured by the FDIC like checking and savings accounts are. They typically require that you deposit a minimum balance amount of $1,000 or more, but they tend to pay higher interest rates in comparison to traditional savings accounts.

3 - Certificates of Deposit - CDs or Certificates of Deposit are loans that you make to the bank based on agreed upon terms, and in return you will receive a guaranteed rate of interest on the principle that you loaned. Some of these CDs have adjustable rates that are tied to a specific index such as the Standard and Poor 500 stock index. Most Certificates of Deposit charge a penalty if you take your funds out before the date of the maturity of the investment. CDs have varying terms depending on the bank, and they range from a single month to five years or even longer if you want. The longer that the term is, the higher the interest rate is, but also there is a greater chance that your investment will be locked in at a lower rate even when interest rates go up, so this is an investment vehicle that you have to balance the risk and reward for.

Photo Credits: Conductive

Originally posted 2009-08-12 03:27:09. Republished by Blog Post Promoter

Related Posts

Should You Pay for Your Child's College Education? Paying for college for yourself or for a child can drop you into debt faster than many other things. Aside from huge disasters like medical emergencies or a home fire, more people get into higher debt by paying for college than any other reason. The best advice for long term......
Why is a Savings Account Necessary? Any time that you are asking someone for starter personal finance advice, one of the first things that you are going to be told is that you need to have a savings account in your name. But why are you necessarily going to need a savings account? The purpose of......
Sunday Money Madness: Bootacular Edition Happy early Halloween! Welcome to yet another edition of the Sunday Money Madness Roundup. I hope you enjoy the posts presented below. Start browsing! Debt | Debt Leveraging: What Happens to a Joint Mortgage if One Partner Declares Themselves Bankrupt asks Debt Free Advice. Financial Wellness Project writes 5 questions......
Learning How to Finance Your Future Most of us think about retirement and panic. It can be tough trying to figure out how we’re going to survive and plan for our futures when we’re just trying to make ends meet right now. If you’re strapped for cash at the end of every month, chances are you......
Saving Money with a Government Loan Option Buying a home is part of the American dream. For more than half of a century, Americans have been set on finding homes to hang their hats. Owning a home is a sign of stability and pride. However, financing a home can be a nightmare that interrupts the American dream.......

Related Websites

Insuring a Hybrid Vehicle This post is a guest blog written by Travis Overby. Due to environmental concerns and the rising cost of fuel, more people are looking to buy or lease fuel-efficient vehicles. In recent years, the sales of hybrid vehicles have grown in leaps and bounds. Not only do hybrid vehicles decrease......
Saving Money by Choosing Used Furniture Most people try to make the furniture that they already own last as long as possible. This is because most furniture is quite expensive—and in today’s economy, the thought of heading out to the furniture store to plunk down hundreds of dollars (or more) on a couch or dining table......
The Benefits of Coin Collecting for Young Children If you have started a coin collection or have had a coin collection for a long period of time, you know how beneficial it can be. There are plenty of different benefits to having a coin collection as an adult, and plenty more benefits to have a coin collection as......
Chinese Paper Money Coins and Paper Money -> Paper Money - World -> China The Chinese actually invented paper money, and the process of making it dates back to the early 9th century. Collectors are always seeking Chinese paper money due to its rich history and value, and this is a currency that......
Collecting Interesting Paper Money Paper money and paper currency has always been interesting and fun to collect, with thousands of coin collectors adding paper to their overall collections. There are some who still fail to see the benefits of adding paper money to their collection; they fail to understand how interested paper currency can......