Money might be tight when you’re a student but some of you out there may want to know how you can save your money and get the most out of it. If you have your money sitting in a simple savings account at your local bank, stop that! You could be earning five times that rate with another bank and it works just like the account you have now. If you’re interested in investing your money, I’m going to show you a few ways on how you can get the most out of your money.
Look at high yield savings or money market accounts
These accounts work just like a savings account but you’re going to get a lot more out of them. Let’s say your local bank is only giving you 0.5% on your money per year, a money market could give you 4% and up, depending on the market. These rates are going to change all the time but as I said, it’s like a savings account, so there’s no risk at all. Let’s use the example below to show you how much you could potentially earn.
You save up $5,000 and put it in a 4% APY money market account. You’ll get 4% over the year. You’ll get $200 in interest per year or $16.66 per month. This is just for having your money sit there!
Certificate of Deposits aka CD rates
A CD rate is a little different than a savings account. This is where you’ll place your money into a deposit for a certain period of time. Depending on the period will depend on how long it will be locked up for. Let’s say you get a 2 year rate. This means you won’t be able to touch your money for 2 years. If you do, you will encounter a early termination fee. CD rates are generally higher than savings rates since the bank knows they will have your money for a certain period of time. For CD rates, look at either Bankrate.com or Gotalkmoney.com for the latest 10 ten rates on the market.
Try stocks or mutual funds
Before you jump into stocks or mutual funds, I would recommend you study the market and how it works before you start investing. If you want to invest into something safe, you may want to look at Blue Chip stocks such as Coca Cola, etc. These are companies that have a big impact in the economy and should give you a decent return. Remember, the stock market can be risky and you can lose money, so invest at your own risk.
When it comes to saving money, these are 3 things you can look into. The first two aren’t risky at all while the stock market and mutual funds are. As long as you do your research and you invest wisely, you’ll be able to save up like there’s no tomorrow!