Below are three different scenarios for determining your money saving goals. Saving money in separate accounts or "buckets" can help you track your progress towards your short and long-term goals. This makes it easy to know how much you need to set aside on a regular basis and can keep you on track to achieve your financial goals! If you need help deciding which savings product is right for you, we're just a chat, a click or a phone call away.
Short-term savings are funds set aside for a very near-future event or use. One common purpose is for an emergency or "rainy day" fund. It could also be for rent or other monthly payments. Short-term funds are best placed in accounts where they can be accessed immediately.
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Medium-term savings are funds that won't need to be accessed for 2-5 years. Examples of this could be a home purchase down-payment, a wedding or other expense that may take some time to save up for. While these funds are not meant to be immediately accessible, they also don't need to be placed in investment vehicles like securities which contain more risk. Account options with higher interest returns are a good choice here.
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Long-term goals are usually associated with bigger pictures events such as retirement or semi-retirement. These goals may take several years or even decades to reach. Your distant goals typically involve more money and regular attention than short-term goals. Examples of these are retirement planning, college tuition and others. These funds are better placed in vehicles that can generate higher returns since these funds won't need to be accessed for an extended period of time.