There’s no getting away from it, we should all be saving. And while that may seem difficult in the current economic climate, it’s still important to save what you can for the future.
It might not seem hugely worthwhile if you’re only putting by what you can, and only receiving dismal interest or return, never mind the fact that the value of the dollar isn’t great just now and banks appear to be merging all the time.
In this instance, it’s worth considering the different options available to you – some of which may be overseas, for example in the UK.
One of the most common methods of saving both in the US and the UK is through a regular saving account. These can usually be opened with a small amount of money – around $25 in US and sometimes as little as £1 in the UK. These are handy as most allow for you to put away savings at your own pace and budget, whilst still having access to the cash, should you need to withdraw. Be careful though, as some accounts may have charges associated with making multiple withdrawals. Also, these accounts tend to hold low interest rates, so if you’re looking for a higher return on your savings, you’d be better looking elsewhere.
Money Market accounts are a popular US alternative, as they tend to offer far higher interest rates. However there is a slight catch – you usually have to hold a minimum balance in the account in order to be eligible for the boosted interest rate. The minimum amount varies from bank to bank, but expect to have to keep $2,500 in your account to gain this interest.
Retirement funds are another common savings option for US citizens. The Individual Retirement Account (or IRA) is essentially a way to save for retirement, though most allow savers the opportunity to withdraw funds when they wish. There are a varying number of IRA options, so it’s worth checking what taxable benefits each one offers and whether there are any penalties for making withdrawals.
A specific type of IRA saving which has seen a significant spike in popularity is the IRA gold option. Basically, instead of using paper currency to save your cash, the IRA gold investment instead stores gold for your retirement fund. This can be advantageous as the value of gold rises with inflation, sometimes at a much higher rate, and so can offer a far better return than a lot of interest rates in savings accounts. For more information on IRA gold, gold prices and the best places to invest, head to goldiranavigator.com.
In the UK, instead of an Individual Retirement Account, people have the option of paying into their own private pension. There are various pension options available, from stakeholder pensions which offer tax relief to standard retirement accounts which allow savers to set their money in a varying option of investments, similar to the idea of IRA gold, but with more scope than merely investing in a precious metal.
In addition in the UK, citizens are allowed to save a tax free amount each year in a specific Individual Savings Account (or ISA). Each individual may hold only one ISA, and account holders may not pay more than the tax-free amount for the year into their account. A great benefit of an ISA is that most are instant access, meaning you can withdraw funds as and when needed, however these usually tend to have lower interest rates. Contrastingly there are options of Stocks and Shares ISAs which offer a higher rate of interest for money which can’t be accessed for a certain period of time (usually 2 years).
The greatest benefits to anyone who pays income tax is in an account which can offer tax-free savings or non-taxable benefits. It’s worth looking into the range of options available to you as an individual in order to get the best savings deal whether in the USA or not.