Q. I saved some money to buy a new car. And of course, now that I have the money, the car prices are so high and the supply so low, I wait as long as I can – at least as long as my old car will allow me. But getting like nothing out of my savings account is painful. Is there anything else i should do with the money?
– Future driver
A. Congratulations on building up the cash you need for your new wheels.
We know low interest rates hurt.
But even though the interest rates on savings accounts and certificates of deposit (CDs) are frustrating, they are still the most suitable place to stash the dollars you’ve accumulated, said Claudia Mott, certified financial planner at. Epona Financial Solutions at Basking Ridge.
“When it comes to saving for short-term goals like buying your car, the money should be kept in an account that presents little to no risk and a high online savings account. yield is probably your best bet, ”she said. .
Certificates of deposit have different maturities and there are penalties when money is withdrawn prematurely, she said. Since it’s hard to know when the car you want to buy will be available, deciding whether a CD is mature enough can be a challenge, so you can avoid 2 or 3 year terms, she said. declared.
“Using a mutual fund or other investment is appropriate for long-term goals such as saving for retirement when the time horizon can handle the ups and downs inherent in capital markets.” , Mott said.
You can try searching online to find a cash account that will earn you at least a little more than what you are currently getting.
Email your questions to [email protected].
Karin Price Mueller writes on Bamboo column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Register for NJMoneyHelp.com‘s weekly electronic newsletter.