People work hard often not knowing what they will do with the money they have earned. If you are one of those people, it’s best for you to start thinking today by answering this question: What you are going to do with the sum of money you have generated?
There are generally two options you can choose from: Investing and saving. Regarding the former, that would be in another article; but now, I would like to focus on the latter: Saving.
Regardless of what people say about banks, there are definitive benefits of saving your money in the bank. Indeed, saving your money in the bank and receive interests on it is not considered as investing. I’d rather consider it as a “safe haven” for your hard earned money. With that being said, you need to open a saving account with a trusted bank with strong reputation.
Now, we all know that savings accounts don’t give you much interest. However, not all savings products are created the same. There are different types of savings accounts – one of them is something I recommend you to consider – a fixed term savings account.
Why you should consider fixed term savings
Fixed term savings account has many names – term deposit, fixed term deposit account, and so on – however, they are work in the same way.
In essence, a fixed term savings account is a type of savings account from which you can get better interest rates by putting away a considerable amount of money for a certain period of time.
Rates and terms can vary from one bank to another – it can be 30 days even shorter or up to 6 years and beyond. Typically, the more you “lock” your money for a specific period of time, you will yield more returns as interests.
The main benefit of fixed term savings is the “locked” interest rate. As rates are varies from day to day depending on the market movements, locking your interest rate can give you a form of assurance that you know for sure the amount of interests you are getting; with variable rates, it’s quite trivial to know how much interests you’ve gained.
Other than the sense of security by knowing what you will get at the account’s maturity date, locking the interest rate can also help you secure your money in uncertain economic situation – downturn economy will impact banks’ interest rates negatively – having everything fixed will get rid of the uncertainties.
Whenever you are ready, you can open a fixed term savings account by contacting your local bank’s branch – be sure you ask about the details: The terms, the interest rates, and so on.