S&P's Financial Focus

Savings Plans

A savings plan is an important part of your financial well-being. Savings accounts pay interest. Some pay a higher interest rate than others, so you need to know which type of savings plan is best for you.

Make a List Use the following information to make a list of savings accounts that will help you choose the savings plan that best helps you reach your financial goals:

Regular Savings Accounts This is the type of account with which most people begin. These accounts allow you to make regular deposits-putting money into the account, and withdrawals-taking money out of the account. A regular savings account is a good place to keep an emergency fund.

Certificates of Deposit (CD) This type of savings account pays a higher rate of interest than regular savings accounts pay. However, instead of making regular deposits and withdrawals, you must leave your money in the account for a set period of time.

Money Market Accounts The interest rate for this type of account is usually higher than for a regular savings account, but you must have a higher minimum balance. The interest rate varies from month to month. You can write checks from this savings account.

U.S. Savings Bonds Like CDs, bonds require that you leave the money in the account for a longer period of time. You purchase the bond at one half its face value. It will then be worth the entire face value after a specific period of time. If you cash in the bond before that time, you will not receive the whole value of the bond.

Standard and Poor’s publishes the globally recognized S&P 500® financial index and provides credit ratings. It also gathers financial statistics, information, and news, and analyzes this data to help individuals, companies, and governments make financial decisions. Go to www.standardandpoors.com to learn more about this company.