The Best Places to Save Your Money Right Now: 6 Account Types to Consider

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The money you have now can help you earn money for later — depending on where you put it. 

Many types of bank accounts let you earn interest and grow your balance over time, such as a high-yield savings account or a certificate of deposit (CD). These can be helpful if you’re building up your emergency fund or saving to buy a house

Other accounts, like checking accounts or traditional savings accounts earn little to nothing on your balance but are great for convenience. They’re often a good choice for regular payments and transactions.

Whether it’s paying a bill or saving for a down payment, there’s an account that’s best for each of your financial goals.  

“Every dollar you’ve got should have a job assigned to it,” says Deaton Smith, certified financial planner and founder of Thayer Financial, a financial planning firm in Hickory, North Carolina. Even if you’re unsure of how you’ll use the money in the long run, putting it in the right account now can help set you up for future success.

Here are the best places to save your money today and how you can choose the right type of account for your financial goals. 

The Best Places to Save Money

  1. High Yield Savings Accounts
  2. Certificates of Deposit 
  3. Traditional Savings Accounts 
  4. Money Market Accounts 
  5. Treasury Bills and Bonds 
  6. Retirement Savings Accounts 

High-Yield Savings Accounts

A high-yield savings account is the best place to keep short-term savings or an emergency fund you may need to access on short notice. You can add to or withdraw from your balance at any time, and there’s no penalty for accessing your money.

“If it’s money that you think you’re going to need in the next year or so, then you’re really going to have to keep that money pretty liquid and pretty safe,” says Fredrick Standfield, a certified financial planner and founder of Lifewater Wealth Management in Atlanta, Georgia. 

High-yield savings accounts have another benefit beyond easy access, too: great interest rates. These accounts have variable interest rates that can exceed 3.00% APY today. As long as the Federal Reserve continues to raise rates, high-yield savings rates will go up, too. But variable rates also mean that if rates dip, banks are likely to lower savings account rates in turn.

How to open an account:

Most commonly, you’ll find high-yield savings accounts at online banks or online divisions of regional or national banks. Usually, you’ll only need your initial deposit, if one is required, and some personal details — such as your Social Security number, name, and contact information to open and fund your account. 

Best fit for: 

This account type is one of the best options for your emergency fund. Experts recommend keeping at least three to six months worth of expenses in an account you can access easily, to help cover unexpected expenses or income loss.  

A high-yield savings account is also a good option for other savings goals, like buying a new car, starting a business, or going back to school. A dedicated account like this can help if you want to keep some money separate from your checking account and have a barrier to avoid spending it, Smith points out. 

Read More: The Best High Yield Savings Account Rates

Certificates of Deposit

A certificate of deposit (CD) is a type of savings account that requires you to lock in an amount of money at a fixed rate for a fixed time period. If you try to withdraw your money before that term ends (or matures), you’ll pay a penalty fee. 

When interest rates are falling, a CD can be a sure way to lock in a rate and guarantee you’ll earn that amount over the term. But when rates are on the rise like they are now, locking in a rate could mean missing out on higher potential interest in the near future. 

CD rates will go up alongside the Fed’s ongoing rate hikes, so experts say short-term CDs (around six months to a year) are better than long CD terms (which can range up to five or 10 years) right now. You can lock in a solid rate today — short-term CDs offer rates as high as 4% APY today —  then roll the funds into a new CD or another account in a few months, instead of waiting three or five years. 

How to open an account:

You can open a CD online or at a branch bank, depending on which CD you choose. Like savings accounts, you’re most likely to find high-yield CDs from online banks. When opening a CD, you’ll need your one-time deposit (some banks require a minimum amount), and personal contact information. 

There are some exceptions, but if you choose a standard CD, you won’t be able to add money after your initial deposit or make a withdrawal without paying a penalty, so you should only put money into a CD that you know you won’t need for the length of the CD term. 

Best fit for: 

CDs are good for specific goals with a set timeline, such as a down payment on a home or a new car you want to buy in a year. But CDs should not be a holding place for your emergency fund or money you need to access quickly. 

Read More: The Best CD Rates

Traditional Savings Accounts

Traditional savings accounts work much like high-yield savings, but they’re more commonly found at large, national banks and typically only earn around 0.01% interest.

“High-yield savings accounts are going to pay more than traditional savings accounts,” says Standfield. “If you go into your local bank, they’re virtually paying you nothing on savings.” 

Still, some people may choose to keep a traditional savings account at the same bank they have their checking account, for convenience. When choosing a traditional or high-yield savings account, or both, you should always pay attention to the interest rate and the options available to withdraw money when you need it. 

How to open an account:

You can get a traditional savings account at most national banks, credit unions, and even smaller regional or local banks. Most banks require your name, contact information, and Social Security number to open an account. 

You can also check if you already have a traditional savings account linked to your checking account, so there may not be any extra work needed to set up an account. 

Best fit for: 

A traditional savings account can keep savings readily accessible, especially if you have a checking account with the same bank. But since you’ll earn next to nothing on your balance, you shouldn’t keep large sums of money in this account if you know you won’t need the funds. 

If you already have a traditional savings account earning very little interest, consider opening a high-yield savings account with a competitive rate and easy access to your money when you need it. 

Pro Tip

You should always make sure the savings account you choose is offered by an FDIC-insured bank or NCUA-insured credit union, to protect your deposits against bank failure for up to $250,000 per account type.

Money Market Accounts

Money market accounts are very similar to high-yield savings, but they have some features that resemble checking accounts. It’s a good place to put your savings with even more ways to withdraw your money when you need it, including paper checks or debit card access. 

On the flip side, money market accounts may require higher minimum balances, and today their rates tend to lag behind what you can get with a high-yield savings account.

How to open an account:

If you’re eyeing a money market account, look at account requirements first. Most money market accounts have a minimum balance, initial deposit, transaction fees, and limits. 

Money market accounts may be offered by local banks and credit unions in your area, and many online banks offer them. When you’re ready to open an account, you’ll typically need to provide personal information, including your Social Security number, income, address, and phone number. 

Best fit for: 

A money market account can help you earn a return while maintaining easy access to your savings. With checks or debit card options, this account can come in handy when you’re using holiday savings to buy gifts or using savings set aside for home renovations.

However, if you’re worried about spending money that’s set aside for a specific purpose, you might want a savings account with a little more restriction.  

Read More: The Best Money Market Account Rates

Treasury Bills and Bonds

Treasury bills and bonds are low-risk savings options backed by the U.S. Department of Treasury. Both bond types take 30 years to reach maturity, but you can withdraw without penalty after five years. There are a few different options: 

  • Series EE bond: You’ll earn interest at a fixed rate for the first 20 years, which is determined before you buy. The value of Series EE bonds is guaranteed by the government to double after 20 years.
    Series I bond: With Series I bonds, you’ll have both a fixed and variable interest rate based on inflation, and this rate changes every six months. Since interest rates are steadily rising, I bonds are becoming more popular because of the higher interest rate compared to other savings options. Right now, you can earn 6.89% with a Series I bond.
  • Treasury bills: Treasury bills are shorter-term investments, with terms that range from four to 52 weeks. With T-bills, you can buy the bill at a discount, and then redeem it for the face value at maturity; the difference is considered your interest earned.

Even though saving money in a bond can also guarantee a return years down the road for college or a home, bonds don’t offer as much liquidity as some savings options.

How to open an account:

You can buy bonds on the TreasuryDirect website or by mail when you file your federal tax return. NextAdvisor has a step-by-step guide to buying I bonds to walk you through the process. 

You’ll need your bank account information to transfer the amount of money you want to use. For bonds, you can purchase anywhere between $25 and $10,000. You’ll need at least $100 to get a Treasury bill. Both Treasury bills and bonds require your personal information and your Social Security number. 

Best fit for: 

With current interest rates on Treasury bills and bonds higher right now, you’ll earn a solid return.

However, you cannot cash in bonds for a certain period of time. Make sure you know the terms of the bill or bond before you make your purchase. For example, you must hold onto an I bond for at least a year, and you’ll forego three months of interest if you cash in before the first five years. 

Pro Tip

If you’re interested in Series I bonds, the annual interest rate is 6.89% now through May 2. The rate resets twice a year, which could impact your return as the inflation rate continues to change.

Retirement Savings Accounts

Savings accounts and CDs are great for shorter-term goals and emergency savings, but there are dedicated ways to save for long-term retirement plans

Common retirement accounts include an employee-sponsored 401(k) or 403(b), Roth IRA, and traditional IRA. These plans are tax-advantaged and typically have annual contribution limits

“You have the ability to put a lot of money into these types of plans and move the needle from a tax planning perspective,” says Smith. 

Depending on the account, you can either pay taxes now or pay taxes later on your retirement plan, Smith adds. A Roth IRA, for example, is made up of contributions that are taxed upfront, which you can earn and withdraw tax-free when you retire. 

Unlike the other accounts on our list, these retirement accounts are investment accounts, usually made up of a mix of stocks and bonds in the market. The money you deposit in retirement savings is meant to be used in the distant future, so it can withstand more risk in the market — with the hopes of earning a greater return over time than you would otherwise.

How to open an account:

Setting up a retirement plan with your employer often has benefits including employee match and tax advantages. You can check with your employer to get started and have your contributions automatically set aside. 

But if you’re self-employed or want to add another retirement account to your plan, you can also self-manage your retirement by starting a retirement plan with an online broker. You’ll need your initial contribution and personal information to get started.

Best fit for: 

Retirement accounts have big benefits for anyone who is eligible to save, including tax advantages (you can either put in money pre-tax or withdraw it tax-free, depending on the plan). Just make sure you’re aware of the restrictions, and any penalties you may pay for early withdrawal.

“Retirement accounts are beneficial for everybody,” says Smith. “Even if you don’t have a big employer-provided type of plan, you still have the ability to contribute to those qualified retirement plans.” Make the most out of retirement accounts, because taxes are probably the biggest expense many people will pay over the course of their lifetime, he adds. 

Frequently Asked Questions About Saving Money 

How much money should go into an emergency fund?

Many experts recommend three to twelve months of expenses for your emergency fund. But even if you can’t save that much to start, it’s more important to save something and set small goals to put aside more money.

Where can I put money to earn the most interest?

High-yield savings accounts are highly recommended by experts for a solid return and flexibility. These accounts earn variable interest that will continue to rise as rates go up.

What are the best savings account rates?

Right now, the best savings account rates are around 3.50% and above. As the Fed keeps raising rates, these rates are rising, too.