It is always recommended to maintain a savings account for emergency or reserve purposes. We recommend having 3 to 6 months of expenses held to address situations where funds may be needed immediately or when planned funds may be used in a short time period.
One major question asked is, "Where do I place those funds to earn a better interest rate?"
Simply put, there are many choices one can make. It can be held in a basic savings or even in a laddered CD strategy, however one of the best ways to earn interest on your hard earned money is in an online money market account.
There are many providers and some that we recommend are: Marcus by Goldman Sachs, American Express Personal Savings and Barclays Online Savings Accounts. These are currently paying over 2.10% APY which is much greater than the national average on a regular bank savings or checking account.
The great news is that these online accounts are FDIC-insured and can be easily linked to your bank account in no time.
There are a couple of points to know about these accounts. They do take a day or two for the funds to deposit into your bank account once requested and deposits made into the account may not be withdrawn for up to seven days.
Despite any small inconvenience, these online money market accounts can earn you a great amount of interest without any additional risk that can possibly be close to inflation and reduce potential loss in purchasing power.
At Newmyer Wealth Management, we have had these accounts for over 20 years and enjoy the benefits of earning so much more in interest than a traditional bank account. It is our hope that you too can enjoy these benefits.