6 Life Moments You’ll Want to Save Money For with Help from a CD
It’s your life. On your terms.
Have you successfully saved a chunk of cash for an event or occasion that’s still more than a year out? Or are you receiving a big tax refund or gift that you’d like to hold on to for that special day? High-five yourself—that’s pretty exciting. But now what happens? It could just sit in your savings account, or you could put it to work by investing in a certificate of deposit (CD). It can make it less tempting to dip into those funds before you need them, and earn a little extra to make the event much more special.
Here are a few big moments you may want to start saving for, using the return rate benefit of a CD.
College
If you have a loved one getting ready to head off to college soon—or if you’re starting another academic year, you probably know how much enrolling to attend a university will cost (and the final numbers can be pretty alarming). According to College Data, the average cost for the 2017-2018 year at a four-year public university was $9,970 for residents, $25,620 for students from out of state, or $34,740 at private institutions.
How early you may want to start saving for college graduate gifting: 5 years or more
An Experience/Vacation
When it comes to saving money, more people have been saving for experiences. According to a CNBC article, 45 percent of American save their money for travel, with the average vacation cost right around $1,145 per person. Some expenses to consider in your vacation budget:
Passport (if you need to purchase or renew)
Pet Care
Ride share/local transportation
Extra baggage charge
Additional sight-seeing fees
How early you may want to start saving for a special experience or dream vacation: 1-2 years or more
Wedding Ceremony/Reception
There are many things that will impact the overall cost of a wedding: Venues, food, photographer/videographer, bride/groom attire—even the date of the wedding! Between the wedding ceremony and reception, most couples will spend anywhere from $2,700 - $10,500 for this big day, not including a honeymoon (Weddingwire.com).
How early you may want to save for wedding expenses or gifts: 1-2 years or more
Starting a Business
The dream business you’ve been planning to make a reality comes with hefty startup costs. The U.S. Small Business Administration states most microbusinesses cost around $3,000, while most home-based franchises cost $2,000 - $5,000 to get off the ground. Between initial startup costs and capital expenditures (one-time costs to purchase assets, such as inventory, property, vehicles, etc.), setting aside money before you’re ready to take the leap can be very beneficial.
How early you may start saving for your own startup or investing in another small business: 2 years or more
Welcoming a Little One to the Family
If you or your family members are expecting to welcome a little one, you may be quickly affected by the initial ‘sticker shock’ of the overall cost of having a baby. NerdWallet conducted a survey to see how financially prepared most first-time parents were, and while 54% of hopeful parents believed their baby’s first year of life would cost $5,000 or less, the estimated actual cost was closer to $21,000. Costs included would be for items like car seats, formula/food, nursery furnishings, and daycare.
How early you may want to save for new baby or adoption expenses: 1 year or more
Retirement Savings Boost
There are many ways to save for retirement, however if you’re closer to retirement age you may want to give those savings an extra boost for the future while minimizing risk. While most Americans are saving more now in their retirement funds than they have in the past, there’s no single answer as to how much each individual will need for their own retirement. The best piece of advice we’ve found? Think about your lifestyle and how you’d like to maintain or change it during retirement to help determine if you need to save more money with a CD.
How early you may want to put aside more savings for retirement: 5 years or more
Saving for a Specific Goal Can Be a Really Rewarding Experience.
Ultimately, your savings goal will be unique to you. That is why we offer a Choose-Your-Term CD Special. For a limited time, you can earn our highest rate, 2.85% APR*, on any term you like that the credit union offers for 12 months or longer, so the funds will be available right on schedule. This promotion is valid until 3-31-2019.
Reach your savings goals with a safe, secure option.
About Certificates of Deposit (CDs)
Certificates of Deposit (CDs) are a safe, virtually zero-risk way to save money because they guarantee a locked-in rate for a certain amount of time that’s usually higher than what you could earn with a standard savings account. Basically, the longer you allow your money to be in a CD, the higher return you’re going to get.
A Quick Refresher on How CDs Work
CDs are a savings option that offer a specific rate of return over an agreed term between the member and financial institution. However unlike a savings account, funds in a CD are not accessible until the CD “matures”. (I.e.: If your CD term is for 2 years, the funds will be free to use after 2 years, along with the interest earned.)
*APY=Annual Percentage Yield. Special “choose your term” option and APY available 1/29/2019 - 2/28/2019 for terms 12 months or longer on standard and youth account CDs, IRA CDs, and business member CDs. Cannot be combined with any other promotional offer; Member Merits rate bonus does not apply. Minimum $1,000 balance required; minimum $500 balance required for youth account CDs. Subject to penalty for early withdrawal; see disclosure for complete terms/conditions. Federally insured by NCUA.