Generate More Income From Your Savings Without Sacrificing Your Needs And Obligations
Dividend rates are rising, and there is no better time than now to take advantage of them. If you’ve been saving and have money set aside to simply collect dividends and grow, you might want to consider taking advantage of savings accounts that offer higher yields.
There are many options for short-term and long-term savings plans. Here’s a guide to help you determine what type of savings account will fit your needs.
Term Share Certificate
This is a type of savings account that allows you to save money at a higher fixed dividend rate for a fixed amount of time. You cannot withdraw the funds during the agreed-upon term, but you earn higher dividends than in a regular savings account.
Term Share Certificates are ideal for both short-term and long-term savings goals as the term agreements are available from 3 months up to 4 years. You can find more information about our Term Share Accounts here.
A money market account is a savings account that generally offers higher dividend rates than a classic savings or checking account and still affords you access to your funds with fewer restrictions than a Term Share Certificate. A Money Market account offers a tiered rate structure, so you receive a higher rate of return and generally higher dividends the more you have in your account.
Money Markets are perfect for those who want to save with a higher yield but need access to the funds. You can find more information about our Money Markets here.
Individual Retirement Account (IRA)
An IRA is simply a place to set money aside for your retirement. The difference between Traditional and Roth IRA options is essentially how you are taxed.
Traditional - A Traditional IRA allows contributions to be tax deferred up front. Withdrawals from this IRA are taxed as ordinary income. You can take distributions without penalty after you’re 59½, or the IRS will force distributions once you reach 72 years of age.
Roth - A Roth IRA allows you to contribute after-tax dollars. Any interest growth, as well as your withdrawals during retirement, are federally tax-free. A Roth IRA also allows you to make withdrawals at any time, for any reason, without penalties or taxes. The growth, or interest, is the only part for which you’ll have to wait until you’re at least 59½ to withdraw without penalties or taxes.
We offer Traditional IRAs and Roth IRAs, along with a Money Market IRA and an IRA Term Share Certificate. We also offer a New York State 529 College Savings Plan and a Coverdell Education Savings Account (ESA). These are all ideal for those with long-term savings goals. You can find more details about IRAs here.
U.S. Savings Bond
A bond issued by the government and sold to the general public. When you buy a U.S. savings bond, you lend money to the U.S. government. In turn, the government agrees to pay that much money back later plus interest. There are two types of U.S. Savings Bonds:
EE Bonds – Can be purchased for any amount from $25 up to $10,000. They earn a fixed rate and are guaranteed to double in value after 20 years.
I Bonds – Can be purchased at the $25 minimum or any amount above that to the penny. These bonds are meant to protect you against inflation. They earn both a fixed rate of interest and a rate based on inflation. The rate is reset twice a year. They can be cashed in after only one year, but if you cash them before five years, you will lose three months of interest.
Savings Bonds are simple, safe, and affordable. They are only available for purchase online. You can find more information and compare bond rates at www.treasurydirect.gov/savings-bonds/.
You can compare rates for our Term Share Certificates, Money Market Accounts, and IRAs here. If you’d like to see actual numbers in action, you can use the following calculators to project your saving potential:
If you’d like to speak to one of our friendly Financial Service Representatives about your saving options, call 315-735-8571 or schedule an appointment today.
Bring This Session to a Live Setting
If you would like to schedule our Community Educator for a seminar or workshop for any Financial Friday educational topic, please email your request to FinancialEducation@fsource.org