Savings accounts give consumers an easy way to save money. You deposit the money into the account, let it accrue interest, and then withdraw it whenever you need it. However, some people need accounts for specific events in their lives. They do not want a general savings account but savings accounts for specific needs. These specified savings accounts give a higher level of organization, different interest rates, and keep you from spending that saved money on everyday needs. Here are some specific savings accounts, brought to you by Knoxville Banking Rates, which you should consider investing your money in.
- College – 529 College Savings Plan – These state-managed investment accounts allow you to save for college without paying taxes on the account’s earnings. You have control of the account, and it can roll over to another child if one decides not to go to college. Anyone can add money to this account, there are no income limitations, and there is no age limit for when the money needs to be used. If your child gets a scholarship, excess money can be withdrawn without penalty and is only taxed.
- Retirement -401(K) Account – Saving money for your retirement is a process that should be started as early as possible. If you start at the age of 30 or younger, then you will have to put away less money each year to have a lucrative savings account. A 401(K) is usually an employer-sponsored account where you can deposit part of your paycheck each month. Employers will sometimes match part or all of your contribution. Money in the account is income tax free until its withdrawal, and any interest you make is not taxed. You might even be able to upgrade to a Roth 401(K) which treats your contributions as after-tax dollars.
- Marriage – Wedding Savings Account - If you really are not looking for material wedding gifts, then a wedding savings account may be the best way to go. These banking accounts give you an easy way to have family members deposit cash presents. Some even will match contributions or make an initial deposit into your account, up to a certain amount. Although this helps you save after a wedding, also consider a high interest savings account to save for your wedding.
- Holidays – Christmas Club Account - Although not all banks offer these, Christmas club accounts offer a better way to go shopping for the holidays. You open an account in January and withdraw the money in November. Setting up monthly deposits from your paycheck can make Christmas shopping much easier.
- Vacation – Vacation Savings Account -Similarly to holiday savings, vacation savings are not offered by every bank. You deposit money during the year and withdraw it at the beginning of June. Keeping money in these accounts allows you to make monthly deposits without the temptation of being able to easily withdraw it.
