October 19, 2022 | Money Matters

How to Pick the Right Savings Vehicle

It’s always a good idea to save money, but right now it’s a uniquely good time to save money.

That’s because rising interest rates mean you may be able to earn more on the cash you set aside. A higher interest rate means you’ll build up more money at a faster rate for your savings goal.

There are a multitude of options for savings, each with its own benefits and limitations.

So, what’s the best choice for you? Let’s look at the top three most common options.


1. Savings Accounts

A traditional savings account is a classic choice. It’s easy to set one up at your financial institution and provides quick access to your money when you need it. If your bank or financial institution is FDIC insured, it is extremely low risk. * Typically, you don’t need much money to open an account, making it the lowest barrier to get started saving. However, the interest earned on traditional savings accounts has been near zero for some time.


2. CDs

A certificate of deposit is another low-risk option but one with a better rate than a traditional savings account. A CD allows a bank to hold your deposit for a fixed amount of time – a few months up to a few years. In exchange, you get a guaranteed return on your money at the end of that time frame. And if your financial institution is FDIC insured, your money is safe.*

In that way, CDs are great set it and forget it option. But you face a penalty for withdrawing your money before the end of that time frame.  


3. MMA

A money market account provides ready access to funds and generally grows at a higher rate than a traditional savings account. This makes it a great option if you want to amplify your savings but don’t want to lock up your funds for too long. Sometimes the trade-off for that flexibility may mean a slightly lower rate than a CD.  Like the other products, the money inside it is protected if the institution is FDIC insured.* (Note: A money market account is different than a money market fund, which is an investment tool that can fluctuate greatly in value.)

Don’t let your money sit idle, put your savings to work!

Umpqua Bank has several limited-time options with competitive rates. 

*The FDIC protects the money consumers put in banks in the unlikely event of a bank failure. Each depositor is insured to at least $250,000 at each insured bank.