When it comes to saving, it’s not just about setting aside money—it’s about growing that money over time. Your FutureTrack coach can help you make informed decisions about your savings options to get the most out of your money.
The Importance of a Strong Savings Strategy
Everyone has different savings goals, whether it’s for a milestone like buying your first home, saving for college, funding your retirement, or creating an emergency fund. However, the key to successful saving isn’t just in how much you set aside, but in how you maximize those savings.
What Is CD Laddering?
One savings strategy that not everyone is familiar with is CD laddering. Certificates of Deposit (CDs) are secure, low-risk savings options that offer a fixed interest rate for a set period of time. The catch is, once you lock in your money, you can’t touch it until the CD matures without facing penalties. That’s where the laddering part comes in.
CD laddering involves purchasing several CDs with staggered maturity dates. For example, instead of investing all your savings in one 5-year CD, you might invest in a combination of 1-year, 3-year, and 5-year CDs. This way, you’ll have access to portions of your savings at regular intervals, and as each CD matures, you can reinvest it at potentially higher interest rates. The benefits include:
- Increased flexibility. By having CDs maturing at different times, you can access your money without early withdrawal penalties.
- Better interest rates. Longer-term CDs often offer higher rates, and laddering allows you to take advantage of this while keeping some funds more liquid.
Coach Tip: To maximize your savings potential, consider setting up automatic transfers into your savings accounts. This ensures you’re consistently setting aside funds without having to think about it.
End the year on a high note by scheduling a meeting with a FutureTrack coach today—it only takes 15 minutes! With their guidance, you’ll be ready to tackle 2025 with confidence and a clear financial plan. Get started today!