People work for various types of financial goals however; they keep their savings in a single savings account. Having this setup, it is easy to forget the amount saved for individual goals. Moreover, many times we borrow money from other goals and returning them is another hard thing to determine. In order to get things resolved, Target Savings is the option which suits the situation best. Using targeted savings accounts, you can split your savings into different subaccounts which you can render to different goals of savings. Now whenever you have to save for a particular goal, you can invest in it and use it when needed.
Target Savings account can be for any goal which can include the following:
-Emergency funds which can help you bail out from a situation of catastrophe.
-Travelling fund in which you can save money and fulfill your passion for arranging holiday trips. These savings can be your end of the month savings.
-Car fund through which you can pay your monthly car installments or bear repairing expenses.
-House fund will help in repaying house loans and mortgage amounts. Moreover, even renovations plans can be covered within the Target Savings accounts.
Organizing accounts in such a manner will not only serve as a powerful motivator but, also helps in achieving goals and fulfilling plans. Targeted savings accounts have several benefits which includes the following:
-The first and the foremost benefit is that it helps an individual to mold their savings in the form of their [personality. Every type of savings can be named and in this way you have the opportunity to make plans along with having the funds to execute your plan.
-Target Savings also provides the opportunity to visualize the progress of your savings. When all the money is stumped within a single account, determining when and how to set aside for different goals becomes tough. Having different accounts help me to see bank statement to understand how much amount has been saved till date and how much more is required.
-Lastly, having these accounts, you will be able to prioritize your goals. If you are planning to renovate your house, you can slower down your investments in other targeted savings account and invest more in your house fund.
These accounts can be opened either online or with your local community credit union savings center. Although, these centers are not quite big in most areas, however, the benefits they are offering, inclusive of opening various accounts are worth investing. The minimum amount required for opening Target Savings account is US$ 20 or EUR: 14. Moreover, alternative one-off contributions can also be made without any limitations. The rate of interest is calculated on everyday targeted savings in the account and then it is transferred to the principal target savings account upon maturity. On the other side, if the account t is closed before maturity, no fee will be imposed as charges however, the interest amount accrued will not be paid either.