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Where Should You Put Your Money?

Americans recently set a record with their checking accounts, carrying an average balance of $3,673. That’s a lot to keep in checking — and it may not be a good thing. Money that stays in a checking account is great for spending, but with that much cash on hand, you’re missing an opportunity to stretch it further. So don’t let your money sit around! Learn where to put it for maximum growth:

Savings Accounts

Savings accounts are one of the safest places to let your money grow since the federal government protects deposits. The downside is that the interest rate is generally relatively low. But you can rest assured that you’ll have fairly quick access to your money whenever you need it. Plus, it doesn’t take much to get started — most financial institutions require a minimal minimum deposit to open a savings account.

Money Market Accounts

Similar to savings accounts, money market accounts are another federally insured option for saving. What sets these accounts apart is that you can expect a better interest rate when you carry a higher balance. The only stipulation is that you’ll need to reach the minimum balance in a tier to qualify for a higher rate. Most money market accounts allow you to transfer money via check, transfer, or ATM.

Certificate Accounts

Sometimes known as share certificates or certificates, these accounts provide interest based on the deposit term length. For example, a certificate with a term of six months will give a lower interest rate than one with a term of 12 months. Take advantage of higher certificate rates without losing much liquidity by taking a “laddering” approach. Laddering involves investing your money across a variety of term lengths. As shorter-term certificates mature, you can reinvest the money into longer-term certificates. Eventually, you’ll have several certificates that mature regularly, giving you more flexibility for cashing out when it’s convenient for you.

Investment Accounts

When you’re ready to take on more risk for the prospect of a higher return, it may be time to open a brokerage account or individual retirement account (IRA). You can use a brokerage account or IRA to buy investments such as stocks, bonds, and mutual funds. If you prefer a hands-off approach to investing, there are plenty of options that allow for automatic investing based on your financial goals. Or, you may decide to build your own portfolio with guidance from an investment professional.

Put Your Dollars to Work

Help your money live up to its potential. Start growing your money with a savings or investment account at Central Minnesota Credit Union. View rates and learn more about our accounts by visiting our website or one of our local branches.