Skip to main content

Short Term Savings Plans

Short term savings plans are designed to help individuals save money over a relatively short period of time, typically ranging from a few months to a couple of years. These plans often have specific goals in mind, such as saving for a down payment on a house, paying off debt, or covering unexpected expenses. By setting aside a fixed amount regularly and earning interest on it, individuals can accumulate a sizeable sum to achieve their financial objectives.

Choosing the Right Short Term Savings Plan​

When selecting a short term savings plan, there are several factors to consider:

Low-Risk Options​

  • High-Interest Savings Accounts: These accounts offer competitive interest rates and liquidity, making them ideal for short-term savings goals.
  • Certificates of Deposit (CDs): CDs provide a fixed return over a set period, but come with penalties for early withdrawal.

Higher-Risk Options​

  • Short-Term Bonds: These investments offer higher returns than traditional savings options, but carry more risk due to market fluctuations.
  • Peer-to-Peer Lending: This option allows individuals to lend money to others and earn interest on their investment.

Other Considerations​

  • Emergency Fund: Having a dedicated emergency fund can provide peace of mind and help avoid financial stress in case of unexpected expenses.
  • Compound Interest: Taking advantage of compound interest by opening multiple savings accounts or investing in higher-yielding instruments can significantly boost returns over time.