Once we are clear that we need liquidity and safety, we will detail the different alternatives that exist to create this bag for emergencies:
1. Savings account: there are different savings accounts (especially online banks) with total-saving availability and instant liquidity and can have your money immediately. You can usually open from 1 $. Today, with interest rates near to 0%, the profitability that we will take our savings in the short term is small.
2. Deposit: the characteristics are very similar, only the term that our money has to be unavailable depends on the time we hire the deposit. Normally we can cancel the deposit in advance but at a lower pay.
3. Money market funds: they are investment funds that invest in financial assets in the short term money market rates such as Treasury bills, government bonds with repurchase agreements and commercial paper, ie in liquid assets, in order to facilitate liquidity shares immediately. For this reason they are called money funds. Assets are very safe and all financial institutions usually sell such funds. It should be emphasized, which is very important to find funds whose management comission is not very high, since the interest rates in Europe at 1,5 % and in USA at 0% , the product can not give us anything of profitability.
4. Current Account: If we do not want to have any trouble finding savings products, we can keep that short-term savings in a current account. Of course, NEVER save on the account where you tend to collect the payroll, pay mortgage and other expenses as we will be very tempted to touch the savings. Open another account at the bank and keep the money separate.
5. At home:another option is to keep our savings at home (as our grandparents did) or in a drawer.
I am in favor of the first option. And how do you organize your savings for contingencies? Do you know any other way to save?
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