As you must be aware of the importance of saving up for retirement, most of us are focused towards contributing to 401(k)s, IRAs, and other types of “nest egg” investments. However, what about short-term savings? Perhaps you might want to create a proper travel fund or save up ample cash for buying a boat or vacation home in the upcoming years. If you have plans towards making a major purchase within a span of 3-5 years, you might want to come up with some short-term savings strategy towards meeting your financial goals.
If you are planning short-term savings, here are a few things that you would like to consider as you will be devising your plan:
- Consider the Risks Firstly: When it comes to short-term savings, you must aim at approaching things quite differently than you would be doing for the long-term savings goals. When it comes to investments, timing is everything. For instance, if you are planning to retire in 10-15 years, you would like to devise a diverse retirement plan consisting of at least 60 percent of stocks. On the other hand, if you are not looking to save up for something in the distant future, you must stay steer clear of the high-risk investments like stocks.
- Consider Opening a Savings Account: As stocks might appear highly risky for the short-term savings, you might consider saving your money in a secure savings account at some leading bank of your choice. Opening up a savings account in a reliable bank serves to be the most secure and a low-risk option when you are considering small-term savings for yourself.
There are several benefits of opening a Saving Account in addition to the usual savings and interest rate benefits. Several banks have come up with a myriad of additional advantages and discounts for those opening a savings account with them. Some of the popular ones are:
- Zero Balance Account: There are several leading banks offering the ease of opening a zero balance online saving account. With such an account, you are not required to maintain any minimum balance in your saving account. Moreover, you are also offered a plethora of additional benefits like virtual debit cards, hassle-free online transactions, and so more. You can get it all with the highly specialized Kotak 811 saving account scheme for yourself. With the Kotak 811 zero balance saving account gaining impetus in the recent times, you can avail the benefits of this free online saving account now!
- Discounts upon Lockers: Most banks are providing around 15-30 percent of special discounts on the locker fee to those who hold a savings account in the bank and maintain the minimum value of the quarterly balance in the respective accounts.
- Family Account Benefit: Banks also allow family members of the account holders to combine the overall deposits and thus, increase the entire corpus.
- Insurance Offerings: Several banks also offer life insurance services along with death cover and hospitalization charges upon opening a saving account. For this, all that you are required to do is to maintain the minimum account balance and pay the premiums on a regular basis.
- Education Insurance for Children: This might serve to be immensely helpful in case of your short-term savings planning. By opening a savings account in a bank, you can link your child’s account with your savings account in the same bank. This will ensure that your child becomes eligible for receiving a proper educational insurance cover. Moreover, you are also able to monitor the overall spending of your child which can help in regulating their accounts in an effective manner.
- Higher Interest Rates: Several banks offer a higher interest rate of around 6-7 percent on opening a savings account which helps in yielding enhanced returns in comparison to most of the fixed deposit account schemes.
- Discount on Gold: An average rebate of around 2-5 percent is made available on buying gold coins from the respective banks, particularly for the customers that have larger savings account balances.
- Cash Withdrawal Facility: The ATM services offered by all the banks help you in withdrawing cash from your savings account across the country, at any time.
- International Debit Card: You are able to convert the debit card into a particular international debit card and then, use the international debit card for making international transactions across the world.
While picking any account for your savings, it is important to look at the different terms and interest rates in order to ensure the best for you. You must take a note of the savings account balance minimum values for avoiding fees along with the length of the terms. In addition to picking the account that you will be choosing for your short-term savings, you might also wish to create a proper plan for finding out additional funds in your budget. There are several ways of minimizing your spending –from small changes in your monthly bills to your overall spending power.
Owing to the myriad of benefits offered by opening a savings account towards your short-term savings planning, you must wait no more and open a savings account now! When you are looking for short-term goals, it is important to choose your investments in a wise manner. Ensure the best short-term savings solution for yourself!