Whether you’re starting to plan for retirement, looking to make a big purchase, or simply want to put money away for a rainy day, there’s no time to start preparing like the present.

Don’t be intimidated by all the options out there, though. With savings bonds and saving accounts, starting to save is easier than you think. But when it comes down to it, is one better than the other?

Is a Savings Bond or Savings Account Right for You?

Savings Account

Savings accounts have been around just about as long as banks. They’re commonly used to ensure a secure financial future, and they’re easy to set up at a local bank.

The key features of a savings account are:

  • Better interest rates than checking accounts
  • Depending on the bank, checks may not be allowed to be written from the savings account without the account owner being charged a fee
  • May have a limited number of transfers/transactions
  • Easily liquidated
  • Meant for long-term investments
  • Able to access funds through the local bank, ATM, or online
  • Not intended for daily expenses

While they may not have the highest savings interest rates, it is easy to build up money in your savings account by following simple saving tips. Budgeting and automatic transfers are just two ways to start getting that money flow into your account.

It’s also easy to set up multiple savings accounts to prepare for different events in the future. One account can be devoted to your dream Europe trip and another to your daughter’s wedding. The professionals at your local bank will be more than happy to help you create a plan that is best for you.

Savings Bond

From the time President Franklin Roosevelt approved the US Department of Treasury to issue federally-backed savings bonds, they have been called many different names: Defensive Bonds, War Savings Bonds, and Education Savings Bonds. Since their beginning, many have depended on bonds for future savings and security.

The key features of a savings bond are:

  • Fixed rate of interest over a fixed period of time
  • Not subject to state or local income taxes
  • Cannot be easily transferred
  • Non-negotiable
  • Endorsed by the federal government
  • Typically take 15 – 30 years to mature
  • In order to redeem a bond you must be a US citizen
  • In order to purchase a bond you must have a Treasury Direct account
  • Lost, stolen, or destroyed bonds can be replaced as they’re registered with the federal government

Savings Bonds are ideal for long-term investment, and are less volatile than stocks. But if something happens and you need money quickly, it’s difficult to liquidate a bond before it has matured.

Of the two, savings bonds are more guaranteed than savings accounts because it isn’t as easy to dip into them if you need money for a sudden expense. It’s a lot simpler to transfer money from your savings account into your checking account, but you should resist the urge to do so. You’re better off letting your savings accumulate and grow over time with interest.

If you really need money before your next paycheck, you can always take out a short-term loan. Payday loans or car title loans are designed for this purpose, and they’re a means to protect your savings while giving you the cash you need to get through a tough moment.

Start Saving Today

Regardless of if you decide to invest in savings bonds, want to stick with the more simple savings account, or would like to create a financial plan that combines both, the most important thing is to just start saving.

Stepping into the world of savings can seem intimidating at first, but the safety both savings bonds and savings accounts ensure makes any sort of investment a win-win. Just remember that in a pinch, you don’t have to panic and take out money you’ve worked hard to save up. We’re happy to help you find another option.