In light of the recent economic downturn, fewer people are relying on credit—instead returning to the time-tested method of saving for what they want and buying it later. Savings can play an important role in a traditional portfolio.
"Most people, when they think about a financial plan, think only about stocks and bonds. Cash can be a big part of it, too," says Jason Epstein, Regions consumer banking executive for North Central Alabama. "Just ask anyone who has experienced an emergency."
Epstein says it's a good idea to keep the equivalent of three to six months' total household living expenses in an immediately accessible account such as a money market deposit account. Money markets can allow you to enjoy the benefits of higher yield rates with the flexibility of having access to your money.
A money market is one relatively safe place to keep your money. A time deposit, or CD, is another.
"CDs are stable and most often FDIC insured," says Epstein. "They offer a slightly higher rate than some other options. A CD isn't as easily accessible as money markets or checking, but you can still get to it in the event of an emergency."
CDs do offer a guaranteed return over the term, which can be attractive in today's volatile market.
Going Green
You might not normally think of a checking account as a savings vehicle, but together, Regions LifeGreen Checkingsm and Regions LifeGreen Savings accounts encourage—and reward—savings. And these new products help consumers save money while also offering several environmentally friendly features. Available exclusively with Regions LifeGreen Checking, the Regions LifeGreen Savings account provides a savings bonus based on the account's average monthly balance for the year and the establishment of a monthly automatic transfer from the checking account.
"This difficult economy is a reminder of why saving is so important—to prepare for the rainy days. We also have reached a point, however, in our country's history when personal savings are at all-time lows," says David Rupp, Regions senior executive vice president of Consumer Services. "This is an opportunity that banks and consumers can address together. With Regions LifeGreen Savings, if customers take up the challenge of saving monthly—which we simplify by automating the process—then that activity is rewarded through a year-end bonus."
For more information on savings and other products, talk to your Regions banker.