We all know that saving money is important, but do you know how to make the most of your hard-earned savings? To achieve your savings goals, it’s best to put your money to work earning interest in either a high interest savings account or Certificate of Deposit (CD). To choose which online bank account type is suitable for you, let’s break down the fundamental differences between each savings option. Live Oak’s friendly, North Carolina-based customer service team is available to help answer any questions.
Savings account
A Live Oak Bank online savings account offers a simple, secure place for you to keep your money and earn interest. Savings accounts offer more flexibility when it comes to accessing your money. There are no maintenance fees or minimum balance requirements for a Live Oak Bank savings account. Savings accounts are simple, straightforward and you won’t face any penalties if you need to withdraw cash on occasion.
Certificate of deposit
A Live Oak CD account is an alternative to a traditional savings account and is suitable for those who are willing to leave their savings untouched for a set amount of time. Otherwise, you will incur an early withdrawal fee. You choose how long you’re willing to leave your savings untouched, which then allows you to lock in a rate based on that term. At the end of the term, also known as maturity, the CD funds can either be withdrawn or renewed at the current interest rate for the selected term. Note that you can choose to have your interest disbursed monthly, which can be an attractive option for those looking to supplement their income with the interest disbursements.
Which is the better fit for me?
Ask yourself a few questions as you decide which type of savings account to open, including “how soon will I need access to my funds?” If you know there’s a specific date in the future when you’ll want to withdraw cash and feel confident that you can commit to the minimum length of time for the CD, that’s probably a better fit for you. Remember, you can lock in rates that are often higher, but you’re obligated to leave your funds in place for a set amount of time. On the other hand, a savings account is a good solution for tucking away money you may need to access on a whim, like an emergency cash fund.
Another key question you must answer is “how much money do I have on hand to put away?” Most CD accounts, including Live Oak’s, have a minimum deposit required to open an account. If you don’t have that minimum dollar amount, an online savings account will be the best option, as there is no minimum balance for a Live Oak savings account.
High-yield savings accounts and CD accounts offer worthwhile options for saving money online while earning high interest. Weigh your options and know that both of these account types are wise choices, depending upon your goals and needs. Get started by opening a Live Oak Bank savings or CD account here.
