Money Management

CDs are hot, hot, hot right now — but they’re not the right savings vehicle for everyone. Learn why one writer has avoided them so far. [[{“value”:”

Here at The Motley Fool Ascent, we do our very best to cover the money news that impacts your life and finances. So it’s really no surprise that we’ve been discussing certificates of deposit a lot lately. The rates on CDs, particularly shorter-term options, have been noticeably higher thanks to the increases in the federal funds rate by the Federal Reserve. This attempt to bring down high inflation in the wake of COVID-19 doesn’t have a direct effect on consumer interest rates, but the two tend to trend in the same direction.

However, the Fed has signaled that rate cuts are likely on the way later this year, depending on how inflation moves (as of the most recent CPI report, it was holding steady at 3.5%). So, if you want in on CDs, now is really the time to make your move!

You might expect that all of us here are 100% all-in on CDs, but you’d be wrong. Personally, I have yet to open a CD of any kind, ever. I appreciate these accounts for what they are, but my financial situation hasn’t ever been quite right to take advantage. So here’s one scenario where a CD would be perfect for me — as well as a few alternative places to keep your money safe and growing.

A CD is a great option in this scenario

Let’s say you’ve got $10,000, and you’re going to be using it to buy a car in a year. By having a peek at our list of the best 1-year CD rates, you find out that you could earn a guaranteed $525 on your money with a 5.25% APY, and finish with a balance of $10,525. Not bad!

I’ve never in my life experienced a scenario like this, tailor-made for a CD. I’ve only had a small amount of money (a few hundred dollars) put aside without a defined timeline, meaning I’d need it any time. This is inappropriate for a CD because if you lock money into a CD for a set term, you’ll owe a penalty if you need to break the term early. The penalty could eat up all the interest you’ve earned so far — or even eat up some of your principal if it’s early in the CD’s term and you haven’t earned enough interest to make it up yet.

The other savings scenario I’ve been faced with these last few years is actively growing my saved cash over time. I set a goal to save $50,000 in 2023 to facilitate buying a home in 2024. I surpassed that goal, and as I write this, I am weeks away from closing on a house, and I’m still saving (which should tell you how expensive I expect this whole process to be).

But since I’m still adding more money to my savings account, a CD wouldn’t work here, either. You can’t add more money to a CD over time. And sure, I could’ve opened a series of CDs when I reached set milestones. But I wanted that cash to be as liquid as possible, especially since my home-buying timeline wasn’t any more specific than “2024.”

Where should you save?

With modern banking, we have so many options for where to store and grow our money — and even options within those options! For example, the overwhelming majority of banking institutions offer at least one savings account. But institutions that offer banking services include big-name national banks, regional banks, online-only banks, and even tiny community credit unions.

In general, though, here are some great options to grow your savings that might work better for you than a CD. (With the caveat that you will not get the guaranteed fixed rate of return that CDs offer!)

High-yield savings account

This is where I keep my savings, and you can find the highest available APYs on the accounts offered by online-only banks. The best high-yield savings accounts (HYSAs) also offer great mobile apps to help you manage your money and minimal (or ideally, no) fees.

Money market account

If you can meet the often-higher opening balance requirement, a money market account (MMA) can be a great option for savers. You get the higher APY of a HYSA with the easier money access of a checking account — many MMAs come with a debit card and/or check-writing capabilities.

Brokerage account

If you’ve got a longer timeline for your money, consider investing it in the stock market using an account you open with a stock broker. Yes, this option carries risk — but if you’ve got a long enough timeline, you’ll be more likely to come out ahead. The S&P 500 has averaged a 10% annual return over the last 50 years. That beats the pants off 5% for a CD if you truly do have years to wait.

If you’ve already got a chunk of money saved and a defined timeline of less than five years for it, a CD might be an excellent option for you. Personally, I’m optimistic that opening a CD might be a good option for some of my money at some point (but perhaps not before rates fall again). The great thing about personal finance is that it’s just that — personal. So weigh your options before making the right choice for you.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Aldi has a loyal following among budget-conscious shoppers. Read on to find out why they love the store. [[{“value”:”

If you’re like most shoppers, you’ve been visiting different grocery stores lately in search of the best prices. Aldi is only one of my family’s favorite places for budget-friendly grocery shopping, but there are many reasons why shoppers love it.

If you like saving money, efficient grocery runs, and access to fun merchandise, Aldi may be just the store for you. Here are five things the grocery store does better than its rivals.

1. Shopping is efficient

The contrast between Aldi and the grocery stores with wine bars couldn’t be more stark. Many items on the Aldi shelves are still in the cardboard boxes they’re shipped in. No one bags your groceries for you or offers to walk your shopping cart out to the car (yes, many Publix locations still do this).

But Aldi’s simplicity and limited selection make for an efficient shopping experience. I’ve been able to breeze through the store, quickly selecting what I need without having to spend much time mulling over nearly identical food options. Who needs 15 different versions of cookies or 50 cereal options, anyway?

2. You save money without effort

Food prices are 25% higher now than in 2019, which means that finding good deals in the grocery store is more important than ever. While some of Aldi’s prices have increased, too, they’re still much cheaper, on average, than at other stores.

A review of prices by The Ascent last year found that prices on Aldi items in the Los Angeles area were 10% cheaper than at Walmart. While Aldi has weekly sales, the store’s everyday low prices mean you don’t have to hunt for deals to save money.

Tip: If you’re looking to save even more money on groceries, there are some great cash back apps that help you earn rewards for in-store and online purchases.

3. Organic foods are cheaper

Organic food prices are often more expensive than the non-organic options. But at Aldi, you can usually find low prices, even for organic foods.

For example, I found a 16-ounce jar of organic salsa for $2.65 at my local Aldi, compared to a similar jar at Publix for $3.87. My local Aldi also sells one pound of organic, grass-fed beef for $5.49, compared to $6.28 at Walmart.

4. Aldi took the lead in moving away from plastic bags

Avid Aldi shoppers know they need to bring their reusable bags with them when they go shopping. That’s because Aldi was the first major U.S. retailer to eliminate the thin plastic bags often used in grocery stores.

The company estimates that its decision to ditch the bags keeps an estimated 4,400 tons of plastic out of circulation annually.

5. The merchandise aisle is a pleasant surprise

There’s one aisle in Aldi that’s different from the rest. Its official name is Aldi Finds, but shoppers endearingly call it the “aisle of shame.” It’s filled with a rotating assortment of items that are available for a limited time.

You may go one week and find brightly colored Aldi-branded flip-flops and, the following week, some potted plants. Two years ago, a $13 wrap dress from the aisle went viral after it became a huge hit with shoppers.

Shopping at Aldi might not be the best choice for everyone. If you like having a lot of options for products and don’t like using a quarter each time you retrieve a shopping cart, Aldi may not be the best place for you. But Aldi is hard to beat if you want great deals and an efficient shopping experience — which is why it’s garnered a loyal following among shoppers.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.

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Camp can be a huge budget-buster. Read on for ways to keep your kids busy and looked after during the summer. [[{“value”:”

You’ll often hear that once you’re past the point of needing full-time daycare, the cost of child care declines substantially. But people who say that tend to overlook one large expense — summer camp.

For parents who work full-time or throughout the year, the need for care doesn’t go away simply because school is no longer in session. Unfortunately, the cost of summer camp could wreak serious havoc on your budget.

The average cost of day camp during the summer is about $87 per day, says the American Camp Association. So if you need eight full weeks of camp, at that price, you’re looking at raiding your savings account to the tune of $3,480 — per child. Ouch.

If that’s not a number you can swing, there may be alternate arrangements that may work for keeping your kids busy and cared for over the summer. Here are some to consider.

1. A town recreation program

A town recreation program may not offer the same amenities as a regular summer camp. Instead of soccer fields and a swimming pool, your town rec program might involve you dropping your kids off for a day of makeshift indoor activities, like art projects and crafts.

But a town recreation program might also be worlds cheaper than traditional camp. So if your town offers a program with long enough hours, it’s an option worth looking at. And even if your town’s program is only four or five hours long and you need eight hours of child care, you may be able to supplement with a babysitter.

2. Library programs

Many libraries offer a host of summertime programs to keep kids busy and engaged with reading. These programs usually won’t give you a full day of care. But if you’re self-employed with a flexible schedule, the 90 or 120 minutes of free care you get three days a week at the library could make it possible to get your job done partially without forking over hundreds of dollars each week. This especially holds true if you can find other free programs in your area.

3. Summer school

In some districts, summer school programs are reserved for children who need to make up for missed learning or poor grades. In other areas, summer school programs are open to everyone. So even if your child is doing just fine academically, it could be worth signing up for one of these programs for the free care. However, you may end up incurring the wrath of your child if you go this route — and there’s a mental cost to that.

4. A child care swap arrangement with friends

Maybe you and some friends or neighbors in town work from home a few days a week, or work from home all the time. If so, you may be able to set up a schedule where you take turns doing child care duty one day a week so that nobody has to pay for camp.

For example, maybe you and four other families can get onto a schedule where you watch five children in your house on Mondays, but your friend is in charge on Tuesdays, and so forth. This arrangement could work if you’re self-employed, because then, you’d make Monday your lighter day or potentially take that day off. It could even work if you have a full-time job with an understanding boss.

5. A babysitter share

We just learned that summer camp costs an average of about $87 per day. But if you’re forced to hire a babysitter to watch your child in your home at $15 an hour for eight hours a day, that’s $120 — more than the cost of camp. And with camp, at least your child gets activities and socialization.

However, it could make sense to do a babysitter share with other families in your area. Let’s say you’re looking at $120 a day to watch three kids. That’s a daily expense of $40 when you have two other families to split it with. You could then set up a schedule where a sitter watches all of the children in your home one or two days a week, one to two days in another family’s house, and so forth.

Summer camp is a huge expense many families resign themselves to. If it’s not in the cards due to the cost, look into these way more affordable options.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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CDs pay impressive rates right now. Read on to find out why they’re still not worth it for everyone. [[{“value”:”

Certificates of deposit (CDs) rates have soared over the past few years, making it easy to find CD rates of 5% or higher.

At these rates, stashing some extra cash into a CD makes sense for some investors. But I’m not convinced it’s the best place for my money. Here are three reasons I’m happy to sit out the current CD market.

1. I don’t want my money tied up

I’m considering buying a house later this year, but the timing is uncertain. If I find something I like and can afford this summer, I may buy it soon. If I don’t, then I’ll wait longer.

This uncertainty makes putting the cash I’ve saved for a down payment into a CD a terrible idea. If I opened a 12-month CD paying a 5% annual percentage yield (APY) but then decided to buy a house in three months, I wouldn’t have access to my money when I needed it.

And taking the money out early would reduce my earned percentage to about 2.5%. On top of that, I’d have to pay fees for closing the CD early.

2. I don’t like the idea of paying penalties to access my cash

Call me old fashioned, but I hate fees. And I really don’t like the idea of paying fees to access my hard-earned money.

If I opened a CD and decided to withdraw my money early, there’s a good chance I’d be charged for doing so. Most banks charge 90 days of simple interest for the money you withdraw from a CD if the term length is 24 months or shorter. For CDs with terms longer than 24 months, you may pay 180 days of simple interest on the amount withdrawn early.

So if I put $10,000 into a 12-month CD paying 5%, then took the money out six months later, I’d owe about $122 in fees.

I understand that potential penalties exist to discourage people from taking their money out early, but it still doesn’t sit well with me. No thanks, CDs.

3. I can get a high yield from a savings account

If CDs were the only place to earn relatively risk-free interest on my money, I’d be more open to them. However, plenty of high-yield savings accounts pay 5% interest or higher right now.

High-yield savings accounts don’t have term restrictions, so you can put money into them and withdraw it at any time. In short, I can earn 5% on my money and access it whenever I want to, penalty-free.

One potential drawback of keeping the money in a savings account versus a CD is that the APY isn’t guaranteed with a savings account. As long as you leave your money in the CD for the entire term, you’ll get the full APY. For most savings accounts, the yield can change at any time.

For all the reasons above, I’m fine with leaving my money in savings or money market accounts and avoiding CDs. They can be a good investment option if you’re looking for a low-risk way to earn interest and don’t mind having your money locked up. But I’d rather have the flexibility of a savings account.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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As you shop for Memorial Day weekend, look for ways to get a better discount on your cookout essentials. Here are some affordable items to buy at Costco. [[{“value”:”

Memorial Day weekend is approaching. In addition to honoring those who have lost their lives in service to our country, it’s a time to relax with friends and family. For many, the long weekend signals the start of summer. And if the weather cooperates, it’s an ideal time to gather for a cookout.

If you’re feeling the squeeze of everyday price hikes, you’re probably looking for a way to get your holiday weekend essentials without draining your checking account. Shoppers with Costco memberships can score deals on picnic-perfect finds. I’ll share a few of the best Costco buys for your Memorial Day weekend cookout.

1. Four-Count Heinz Ketchup, Relish, and Mustard Picnic Pack

No holiday cookout is complete without all the classic condiments. Whether grilling hot dogs or hamburgers, this four-count Heinz Ketchup, Relish, and Mustard Picnic Pack is an ideal addition to your event. You can purchase this pack in-club or online.

The pack includes two 31-ounce bottles of ketchup, one 26-ounce bottle of sweet relish, and one 28-ounce bottle of yellow mustard. Even better, it costs only $10.99. Target sells 32-ounce Heinz Ketchup bottles for $4.99 each. So, this is a solid deal if you need to restock your condiments before your next gathering.

2. 186-count Dixie Ultra 10.0625-inch Paper Plates

If you want to make clean-up easier after your get-together, buy some disposable plates. Costco sells its 186-count pack of Dixie Ultra Paper Plates for $23.99. Members can score an additional $4 discount through June 9, 2024, making the price $19.99.

That works out to a cost of around $0.11 per plate. At Target, you’d pay $9.19 for a 64-pack of these plates or just over $0.14 per plate. Getting this cookout essential at Costco to save money is worthwhile.

3. 12 pounds of Pederson Natural Farms 100% Grass-Fed Organic Ground Beef: Less than $11 per pound

Are you planning to grill up some burgers for the holiday? Costco has you covered.

Here’s an item you may want to shop online only.

For $129.99, you can get a 12-pack of one-pound packages of Pederson Natural Farms 100% Grass-Fed Organic Ground Beef, which is about $10.83 a pound. Each pack contains 85% lean/15% fat ground beef. Shipping is included.

If you were to buy 12 pounds of this beef directly from Pederson Natural Farms, you’d pay $187.96. This Costco deal will save you almost $60 (the annual cost of a basic membership!). If you prefer to shop in-club, Costco has great deals on meat that you can shop locally. Visit your local club to learn how much money you can save.

4. 30-count 7.5-ounce Pepsi Mini Cans: $16.49

Don’t forget the beverages. Costco sells a 30-count pack of 7.5-ounce Pepsi Mini Cans for $16.49, about $0.55 per can. These adorable mini-sized sodas are ideal for a cookout. With smaller-sized cans, there’s less chance of drinks going to waste. Target sells a 10-pack of these cans for $6.39, or about $0.64 per can. Costco saves the day again!

Maximize your savings this summer

You can host enjoyable gatherings this summer without spending beyond your means. Becoming a Costco member is one way to stay on budget. Review our ultimate Costco guide for some helpful tips on getting the most out of your membership perks.

Another tip is to use cash back credit cards. You can earn rewards when you swipe your card for everyday purchases like groceries and household goods. While you won’t get a direct discount on your shopping bill, you can redeem your rewards for a statement credit to your credit card account or make other valuable redemptions.

Top credit card to use at Costco (and everywhere else!)

If you’re shopping with a debit card, you could be missing out on hundreds or even thousands of dollars each year. These versatile credit cards offer huge rewards everywhere, including Costco, and are rated the best cards of 2024 by our experts because they offer hefty sign-up bonuses and outstanding cash rewards. Plus, you’ll save on credit card interest because all of these recommendations include a competitive 0% interest period.

Click here to read our expert recommendations for free!

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Target. The Motley Fool has a disclosure policy.

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