Savings for after college… CD or savings account?
I’m planning on moving to London after college, I’m from MO, and I’m not working anymore, so I’m planning on saving $100 from my tuition for moving, this is at least a 5 year plan, so I was wondering, which would be more beneficial a Certificate of Deposit, or a savings account?
Also, does anyone have any suggestions as to how much money I need to save for this move? I was thinking at least $3000
* I get money each semester from my tuition, it’s extra, so I’m planning on adding more every 4 months or so
I think your best option right now is a “reward savings” account, which is a savings account where you can add money as often as you can -normally- and get a high interest rate. The additional advantage is that if you needed your money, you can withdraw it, but they’ll pay you a lower interest rate that month. Check some of the comparison sites to check the account that pays you the highest interest (like lovemoney.com, moneysupermarket.com, etc. From the high street, I suggest Barclays or Abbey, which are paying around 2.5% or more)
I wouldn’t recommend a Certificate of Deposit (or Bond) at the moment, until you have a large sum to save. Some of them require a minimum investment of 500 or 1000 pounds, but the rates are not very competitive at the moment unless you want to tie up your money for a long time… whcih I wouldn’t recommend since interest rates will go up eventually. Additionally, you can not normally access your savings or youl’ll have huge penalties if you want to do it.
So for me it’s clear, shop around and get the reward savings account that suits you best.
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