Common Mistake: Keeping All of Your Savings in a Savings Account

You may settle for a savings account because you’ve put money there all your life. You also might like being able to tap your account on a moment’s notice. The down side, however, is that keeping your money in a savings account might delay your plunge into true investment vehicles, which pay a higher interest rate or return on your money. Some of those investment vehicles give you ready access to your funds and about the same level of safety. They also stand a better chance of keeping pace with inflation.

Tip: Start with FDIC-Insured Investments

As you stop in at banks to learn more about savings accounts, you may be directed to a person selling other kinds of investment products. Those products are not insured by the FDIC. It’s best to hold off on those conversations until you become fully acquainted with all of your investment options that are FDIC protected.

Tip: Get the Interest You're Due

Before closing a savings account or making a withdrawal, make sure you receive all of the interest to which you’re entitled to that date. You may not get credit for some of your interest if you make a withdrawal before the end of the month or quarter.

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