In today’s time, there is a great deal of importance when it comes to saving up money, and you probably have thought of different ways to grow your savings.
Having a savings helps in preparing you for the future. While it’s important to have money for things such as gas, groceries and bills, no one knows what will happen and tomorrow is never promised so it’s important to make sure your finances are in order for emergency purposes.
Additionally, saving up extra money leaves room for larger expenses such as a buying home, paying for your college education or saving up for your retirement fund.
But what are some ways to grow your savings? We’ll take a look at five different ways to do so.
Open Up a Savings Account
One of the most well-known, go-to ways of growing your savings, or a savings in general, comes with opening a savings account. With a savings account, you’re able to put away a little bit of money at a time, just in case you may need it for something in the future.
The important thing about saving accounts is that you should have one as early as possible; the earlier you start putting that extra bit of money away, the more you’ll be able to accumulate for future usage.
Investing in Stocks
When coming up with ways to grow your savings, opening a savings account with your bank helps with short-term goals. However, if you’re looking at growing your savings long-term and want to potentially accumulate more money, look into stock investments.
Stocks are shares of a publicly traded company that you own; even if you own the smallest amount of the company, you’re entitled to large amounts of money. As a stockholder, you’re able to vote on important decisions regarding the company; additionally, when you receive dividends each quarter, you have the chance to cash it out or reinvest it.
Exchange Traded Funds (ETFs)
I recently talked about Exchange Traded Funds, or ETFs, but I’ll explain them again briefly.
ETFs are investments funds that trade on an exchange just like stock; because of this, the investor is able to look up the price change as it moves throughout the day. These kinds of funds also offer lower risk than stocks do and have low-cost expense ratios. ETFs are also good when it comes to diversifying your portfolios for markets you may not be as knowledgeable in.
Buying Savings Bonds
Bonds can be purchased through companies, but you can also get them through local governments and countries. If you purchase bonds in the United States, those become exempt from both state and federal taxes and its interest can be tax-deferred until your bonds are redeemed; in contrast to bonds, regular savings accounts include interest that accumulates gets taxed like ordinary income.
In addition, bonds have credit ratings. So the better your credit rating for bond is, the lower the interest will be and vice versa.
Cryptocurrency Savings Accounts
Cryptocurrency savings accounts are exactly what they sound like: these are savings accounts made specifically for cryptocurrencies like Bitcoin, Litecoin and more.
Bitcoin first took off in 2015 and since then, those who originally invested in it benefitted from investing as early as they did and often became rich. With a cryptocurrency savings account, you deposit your type of cryptocurrency and earn a standard rate of return over time. These accounts help investors earn money on their assets while they have them.