Where's the Safest Place to Keep Your Money?
September 21, 2020 (Investorideas.com Newswire) If the global pandemic has you a bit shaken about where to keep your money, you're not alone. In addition to exposing a broad array of financial inequities across the world, the COVID-19 pandemic has also illustrated that many people's job security and emergency fund savings weren't quite what they thought it was. As a result, more and more people are paying attention to their personal finances and looking into ways to bolster their savings.
When it comes to saving money, though, there are a wide variety of options to consider. Whether you're looking to become an investor or simply make smarter bank deposits, there are plenty of different ways to amp up your portfolio and be a better saver.
Where should you keep your money?
One of the safest places to keep your money is in the bank. That being said, if your money is sitting in a basic checking or savings account, you aren't making your money work for you and you likely won't hit your financial goals. Especially when you take the inflation rate into account, it's important to be gaining some amount of interest on your savings so you're never getting close to negative territory.
That's why you need to do a little more research on your bank's monetary policy. From finding a high-yield savings account to looking into short-term investments with guaranteed returns, there are a few different options to consider. That being said, you may need to change from a commercial bank to a credit union or other eligible institutions in order to get the best interest rate and terms.
What sorts of financial products are a safe bet?
When it comes to fighting against inflation, sometimes the best defense is a good offense. This is why finding a deposit account that offers a reasonable interest rate can help you avoid negative rates and in fact grow your money safely while it's effectively just sitting in a savings account. Whether it's a short-term interest rate or a longer-term margin, it's important to find the right vehicles.
Now, it is worth pointing out that the sorts of interest rates and returns on these sorts of financial vehicles aren't going to come close to what you could make in the market. That being said, if you want to diversify your savings and have a safe bet, it's worth looking into something called a term deposit.
What's a term deposit and how does it work?
Also known as a time deposit, term deposits offer you the ability to let your money mature at a higher rate with the understanding that it will take a certain amount of time before it reaches that maturity. Different term deposits have different lengths of time and different interest rates, with the longer you're willing to leave your money untouched generally giving you the best returns. It's also worth noting that most banks require a minimum amount of money to be deposited in order to use a term deposit. In Australia, for example, most deposit accounts require at least $5,000 to get opened.
Interest rates for term deposits vary from financial institution to financial institution, so it's a good idea to compare a few options online before you go making any large deposits. That being said, once you've found a good solution that works for you and your money, it can be nice to know that your money is safely stored in a banking system and will have accrued more than a nominal interest rate in its time there. Some of the most common terms for term deposits are six months, twelve months, and 24 months; however, it's possible to find a term deposit for as little as 30 days.
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