America Saves Week

Jason Rogers from Mountain America Credit Union highlights some of the different ways to start saving and the pros and cons of each.

It’s a sad fact that most Americans aren’t good savers. To remedy this problem, more than 1,000 non-profit, government and corporate groups, including Mountain America Credit Union, have come together under the “America Saves” banner. This nationwide campaign includes one full week each year during which individuals are encouraged and assisted to assess their savings progress and take action to reduce debt and build wealth.

During America Saves Week 2011, February 20 – 27, Mountain America is running a special promotion on its Facebook page, www.facebook.com/macufb, which can help jumpstart a savings plan. Mountain America also provides a full range of savings options to help credit union members develop and grow their savings accounts.

THREE POPULAR SAVINGS OPTIONS

IRAs
An IRA, Individual Retirement Arrangement, is a great long-term option for retirement planning. There is a variety of IRAs, but the most common are Traditional and Roth (see how the two stack up). With an IRA, funds have more growth potential and tax advantages than a typical savings account. It is also very flexible, providing various investment options. One thing to note is that IRAs are intended to be long-term retirement plans. This means there may be penalties for withdrawing funds before retirement age, which the IRS considers 59 ½.

Term Deposits
Term Deposits, also known as Certificates of Deposit (CDs), are ideal for long-term saving. Money is invested at a fix rate and for a fixed period of time (anywhere from 30 days to 5 years or more). In exchange for keeping the money on deposit for the agreed-on term, institutions usually grant higher interest rates than they do on more fluid accounts. Term Deposits are insured by the NCUA or FDIC (depending on where you bank), so they are a very safe option. Although Term Deposits are set for a fixed period of time, it is possible to withdraw funds early. However, a penalty is incurred.

Money Market Accounts
A money market deposit account (MMDA) is a good option for savers who prefer to earn good interest dividends without locking up funds for a set period of time. Rates are typically lower than those offered by a term deposit, but accountholders can withdraw funds at any time without penalty. However, most money market accounts require accountholder to maintain a minimum balance. Otherwise, interest dividends do not accrue. Money Markets are insured by the NCUA or FDIC.

For additional information on Mountain America savings accounts and or to speak with a financial representative, please call toll-free at 1-800-748-4302 or visit www.macu.com. To participate in Mountain America’s promotion on Facebook, visit www.facebook.com/macufb.