Step 5: What’s next?

Once you’ve reached your goal and have enough to cover the unexpected, it’s time to think about the future. Financial experts recommend having enough cash to cover three- to six months of living expenses. If you’ve managed to save that – and a little extra – in your emergency savings account, you may want to think about further maximizing those funds – because in a year, the amount needed to cover six months of living expenses could change drastically. Your cost of living could increase, a family member could become disabled, you could change careers, or your property taxes could increase. All of these are good reasons to consider a strategy that stretches beyond your initial savings goal.

For example, you can begin a new emergency savings goal and put the money already accrued into a CD – or choose to invest it. Most CDs require a minimum deposit amount and may offer rates contingent on the size of the deposit. The interest you earn on your deposit depends on the interest rate, the term of the deposit, and the compounding method.

The higher interest rate of a CD means that you can see a significant boost to your emergency fund, which can help you further down the road. Just make sure you have some funds set aside that you can access quickly in an emergency, as you will not be able to access your CD balance until the term has expired.

However, don’t be afraid to use the money if you need it. If you spend what’s in your emergency savings, just work to build it up again. Practicing your savings skills over time will make the process easier!

If you need help building a savings strategy, visit your local, welcoming banking center, or meet with one of our attentive bankers!

You can use our CD Interest Calculator to calculate your savings at maturity. Having trouble determining which CD is best for you? Compare two CDs.