Creating a custom savings strategy

Before diving into the specifics of creating a deposit strategy, let's understand why having one is crucial. A deposit strategy is essentially a plan for managing your cash reserves. It helps you make the most of your money by earning a competitive return while ensuring that your funds are accessible when you need them.

A deposit strategy is a fundamental component of your overall financial plan. It complements your investing strategy, ensuring you have the cash on hand to seize investment opportunities or cover unexpected expenses without disrupting your investment portfolio.

A deposit strategy allows you to allocate funds efficiently across various financial goals. Whether you're saving for short-term purchases, emergencies, or long-term objectives like retirement, a well-crafted deposit strategy can help you reach your targets faster.

Now, let's explore how to create a deposit strategy using different products available on Raisin.

Purpose: Storing cash needed in the near-term for regular expenses

When you have cash earmarked for immediate or short-term needs, high-yield savings accounts and money market deposit accounts can be your go-to choices. These accounts typically offer higher interest rates than traditional savings accounts at brick-and-mortar banks, making them ideal for parking funds you'll need soon.

• Assess your short-term needs: Start by evaluating your upcoming expenses. This may include monthly bills, rent or mortgage payments, and other regular expenditures.

• Choose the high-yield savings or money market account that’s right for you: Raisin offers access to an expansive network of banks and credit unions, allowing you to select an account with competitive interest rates. The money you deposit to this account will grow steadily while remaining easily accessible.

• Separate your savings: With your single Raisin account, it’s easy to open high-yield savings accounts or money market deposit accounts at multiple banks and credit unions. This strategy can be used to separate funds for different needs (think: a rainy day fund vs. your vacation fund) or to maximize deposit insurance coverage.

• Monitor and adjust: Periodically review your expenses and adjust your contributions as needed. If your expenses increase, increase your transfers accordingly to maintain a sufficient buffer.

Purpose: Earning a higher rate on cash not needed for a longer period of time

High-yield certificates of deposit can be an excellent addition to your deposit strategy if you have surplus funds that you aren’t expecting to need to access for several months or even years. CDs typically offer higher interest rates than high-yield savings accounts, making them a valuable tool for growing your money over a fixed period.

• Define your investment horizon: Determine how long you can comfortably lock away your funds in a CD, keeping in mind that you’ll typically be subject to early withdrawal penalties if you need to access funds prior to the CD’s maturity date. Raisin offers CDs with varying maturity periods, allowing you to choose one that best aligns with your goals.

• Select a CD term and bank: Browse through the options available on the Raisin platform and choose a CD term that suits your timeline. Remember that longer terms often offer higher interest rates.

• Diversify your deposits: Consider spreading your surplus funds across multiple CDs with different maturity dates. This strategy, known as a CD ladder, ensures that a portion of your money becomes accessible at regular intervals while still earning competitive interest.

• Plan for renewals: Keep track of your CD maturity dates and plan to either renew or withdraw funds based on your needs. Raisin's platform makes it easy to manage and track your CD investments.

Purpose: Earning a higher rate on cash that may be needed sooner but not right away

Emergency funds are crucial for unexpected expenses, and no-penalty CDs can be a valuable tool for growing this financial safety net. These CDs offer competitive interest rates and the flexibility to withdraw funds without incurring penalties, making them suitable for your short- to medium-term needs.

• Determine the size of your emergency fund: Calculate how much you need to cover essential expenses in case of unexpected circumstances. Aim to build a fund that can sustain you for several months.

• Choose a no-penalty CD that suits your needs: Select no-penalty CDs with terms that align with your expected timeline for needing access to the funds. Raisin's platform provides options from various banks.

• Automate contributions: Treat your emergency fund like any other financial goal. Set up automated transfers to your chosen no-penalty CD to ensure steady growth.

• Access funds when needed: In case of emergencies, you can withdraw your funds without penalties. This provides you with both security and growth potential for your emergency fund.

Your deposit strategy should not be a one-time endeavor. Life circumstances change, financial goals evolve, and market conditions fluctuate. Therefore, it's essential to review and adjust your strategy periodically. Here are some key considerations:

• Evaluate your financial goals: Revisit your short-term and long-term financial objectives. Ensure that your deposit strategy aligns with your current needs.

• Monitor interest rates: Stay informed about interest rate movements. Raisin offers a platform where you can easily compare rates and consider moving your funds if more competitive options become available.

• Assess emergency fund adequacy: For strategies involving emergency funds, periodically check if your savings are sufficient to cover unforeseen expenses.

• Rebalance and diversify: If your goals change or you accumulate more savings, consider diversifying your deposit strategy further by exploring other products available on Raisin.

Creating a deposit strategy is pivotal to achieving your financial goals and maintaining financial security. Raisin offers a wide array of products, including high-yield savings accounts, money market deposit accounts, high-yield CDs, and no-penalty CDs, to help you craft a winning strategy tailored to your unique needs.

Financial success begins with a well-structured deposit strategy. Start optimizing your cash reserves today and watch your money grow.

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.