| Your bank can do more for you than simply hold your | | | | certain minimum amount to be kept in the account in |
| money and issue checks. Many banks, especially larger | | | | order to draw the interest. These are sometimes |
| national banks, also offer investment and savings | | | | called NOW accounts. NOW stands for Negotiable |
| options for customers. Here are some of the more | | | | Order of Withdrawal. |
| common ones: | | | | Many banks offer a Christmas club feature that is |
| Bonds: A bond is a debt security certificate. In simple | | | | helpful for setting aside money for holidays. The details |
| terms, when you buy a bond you are lending money to | | | | of these vary from bank to bank and some will |
| some enterprise. That might be a corporation or it | | | | assess penalties if the money is taken out early. |
| might be the US itself. In exchange for lending the | | | | You have probably heard of money market funds. |
| money, you get a specific interest rate which is paid to | | | | These are mutual funds that are invested in |
| you either at maturity of the bond or at intervals during | | | | high-quality, short-term corporate and government debt |
| the life of the bond. The principal is paid back to you at | | | | securities. These accounts will usually earn a variable |
| maturity. | | | | interest rate that is often similar to the interest earned |
| The Certificate of Deposit (CD) is perhaps one of the | | | | on CD's. With money market funds, you can withdraw |
| most well known investment options sold at banks. | | | | money at any time without penalty. Keep in mind, |
| They are a unique type of deposit account with | | | | however, that the FDIC does not insure your principal |
| special requirements. They pay a higher rate of | | | | or the earnings in a money market fund. |
| interest than a regular savings account which is why | | | | A money market account offers consumers higher |
| people use them as investment options. In general, you | | | | interest rates than a standard savings account, but |
| put in a specific amount of your money into the | | | | they almost always require a minimum balance, and |
| account and you receive a fixed amount of interest in | | | | there are limits to the number of checks that can be |
| return. An important distinction with CD's is that they | | | | written per month. Most carry a monthly service fee if |
| are covered by the FDIC up to $100,000. | | | | the minimum balance is not kept. The FDIC does insure |
| Brokered CD's are another form of CD's. These are | | | | these accounts. |
| sold through brokerage firms and they will often have | | | | An interest-bearing savings account is another easy |
| a higher interest rate than those issued by banks. | | | | way for consumers to earn interest from the bank. |
| These may be callable, which makes them a riskier | | | | Details on these vary from bank to bank so it is a |
| investment. Although brokered CD's are sold through | | | | good idea to shop around for the best rates. |
| brokerages, they are issued by banks. You should | | | | Some banks offer premium savings accounts. These |
| check to see if they are insured by the FDIC. | | | | accounts usually have tiered interest rates that are tied |
| Interest bearing checking account is another way to | | | | to higher balances. The more money you keep in the |
| make some money through your bank. These | | | | account, the higher the interest rate you receive. |
| accounts are just like regular checking accounts but | | | | See your bank for more ideas on how to save and |
| they usually require a minimum deposit as well as a | | | | invest with them. |