1. Look for options that pay higher interest
You may be tempted to put your money into a savings accountSavings account A bank account intended for depositing funds. Pays interest and lets you withdraw cash at any time.+ read full definition and then forget about it. You may not lose money this way, but you could make it grow faster somewhere else. Here are some options to consider.
2. Only buy products you understand
Choose optionsOptions An investment that gives you the right to buy or sell it at a set price by a set date. The buy right is termed a “call” option, and the sell right is termed a “put” option. You buy options on a stock exchange.+ read full definition that you feel comfortable with. Look at the reasons for or against each choice, then make the decision that’s best for you.
3. Understand the fees
There’s usually a cost involved in saving or investing money. Find out about any fees you’ll have to pay and compare them with other options. Don’t pay for any services you don’t need.
4. Make sure you can access your money if you need to
If you’re saving for emergencies or for other short-term goals, make sure you can get at some of your money quickly and easily. Ask if you’ll be charged any fees or penalties if you decide to take your money out earlier than you expect.
Savings accounts give you low risk and easy access to your money, but they also have a lower return than other short-term investments.
Use this calculator to see how even small amounts of money saved add up over time.