Start a solid savings plan

Start a solid savings plan

2 July 2008

Savings accounts can provide exceptional returns when you manage the money you have correctly, due to high interest rates, but you need to be able to keep more of what you earn to get the most benefit.

While putting away some money for savings is usually considered preferable to none at all, there is a big difference between having emergency savings and building a nest egg. If your savings accounts only hold a few thousand dollars, the money is likely to be earmarked or else on hand for emergencies rather than increasing your wealth.

A savings plan can be necessary if you want the interest rates on your savings accounts to make a difference. Consistent deposits into high interest savings accounts will help your balance to rise to a point where interest earned will be significant. Once you have enough money saved away, you may even begin considering putting some money away in term deposits to benefit from a higher interest rate, although without access to the funds. Even if you only stayed with high interest savings accounts, if after ten years you had saved $100,000, then after that if you kept it in savings accounts that offered only 5% p.a. you would make $5000 each year from savings.

Consulting a professional financial advisor can be an excellent way to start planning your savings, and it could even help you to find suitable savings accounts.

Back to News Index | Back to Home