The Most Popular Alternatives For A Conventional Savings Account
When you deposit money in a place expecting the money to grow during a particular duration then it is called investment. Savings accounts do come with small interest rates but these are often not considered as investments. People have savings accounts because they are simple and straightforward and they make transactions simpler. Talk about simplicity for those looking to make trading simpler there are trading bots. People look for simplicity when it comes to saving and investing money so that they could save time. Are there other similar simple options where you can park your funds other than the savings accounts? Yes, there are several alternatives. Savings accounts and even the high yield savings account all come with very small interest rates. So here are a few other options that come with a relatively higher rate of returns-
- High yield money market accounts
Money market accounts are known to be the closest alternatives to a savings account as they also offer a liquidity that is somewhat similar. With the FDIC insurance, they come with when you choose a money market account you would be getting higher interest rates.
- High yield bonds
Bonds are considered safe investments. There are even many that come with a short tenure. The high yield bonds are riskier than the other options but the returns from them are high even with a small investment.
- CDs for long-term
For those looking for security Certificate of deposits are perfect. If you choose a long-term CD then larger returns are guaranteed. This is a perfect option for those with funds that are not required in the near future. In a savings accounts these can be held for a really long duration without much growth but in CDs, they would come back with a good interest added.
- Stocks with dividends
Dividend stocks take into account not the price of the stock but the number of stocks that an individual owns. Dividend yields are some of the best profits to add to your portfolio even as a new investor.
The above options might not offer the same amount of liquidity or the same security that savings account offer. The convenience of accessing the funds might also not be the same. But if you have extra funds that could be put to better use than lying idle in a savings account then the above choices could be considered.