I want to start saving for a vacation, but have bad spending problems! If you know of one like this, what bank does it?
Related posts:
- What Are The Different Kind’s Of Accounts? I Am Looking For Something Where I Can Put Money As Savings?
- What Are The Different Kind’s Of Accounts? I Am Looking For Something Where I Can Put Money As Savings?
- Is There A Savings Account Out There Where You Can Deposit Money Into But Cant With Drawl Until A Certain Date?
- How Old Were You When You Opened Your First Checking And Or Savings Acct?
- What Kind Of Savings Account Am I Talking About?
yes. it’s called a certificate of deposit (CD) and they earn a much higher interest rate than a regular savings account. you choose your term…shortest is 7 days, longest is 10 years, or anything in between. banks have a minimum balance depending on the term. anything less than a month will be pretty high…anything from a month to a year will be about a tenth of that, and anything a year or longer shouldn’t be very much. longer terms get higher rates, too. check with your local banks to see if they have any specials going on. with a CD, there is a penalty for early withdrawal, but you can have the interest either add in to the balance (it’s called capitalizing) or have it sent in checks to you every month. check out my bank’s online rates! http://www.1stsource.com you can open a CD online in a matter of minutes!
You can do that with your Christmas savings fund. They send you a check the day after thanksgiving. Or you can talk to your bank to modify the dates.
It used to be called a Christmas Club, though I haven’t seen that term for quite a while. Ask your bank. I bet they would set it up for you.
You can take out CD’s (certificate of Deposit) at most banks. They have a certain number of months that you leave the money in and it draws interest (about 4-5%).
Try putting your money into a GIC for a predetermined amount of time. 30 day, 60 day or longer. When your term is over you have the choice to reinvest or withdraw. Interest rates are better in the longer terms but may not be feasible for you. Some institutions require a minimum deposit – usually $500 – $1000.
Another option would be to start a different account and not have easy access to it, so the temptation is not there to take money out.
Money Market, IRA, ROTH IRA
I’d recommend a money market account. You can setup this account to automatically take a certain amount from your checking/savings each month.
We have five of these accounts (emergency, vacation, car insurance, car replacement & christmas). It’s great because I don’t have to think about it.
I don’t believe there’s any kind of account where you cannot get the money out until a certain date. Some, like CD’s may penalize you for early withdrawl, but ultimately they’ll let you have the money.
Checkout my blog site (see below) and specifically my recommendation on money market accounts.
Scott…….
A lot of banks offer vacation clubs. They are more often offered at credit unions. However, all of them have to allow you to take out the money any time that you want to. After all, it is YOUR money. Some of them might attach penalties for early withdrawal which might provide some disincentive to take it out early. That said, why would you want that? You should create your own disincentive so the bank doesn’t profit from your lack of will power. I would suggest that you make yourself a rule that you take 10% of whatever the balance is as a “penalty” if you take it out early and refuse to permit yourself to use that penalty for the vacation. Put it in your emergency fund or pay off some credit cards.