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Simple Ways to Earn

A good first step toward saving is to open a savings account at a bank or a credit union.

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In this lesson, you'll learn about:

  • The benefits of banking.
  • Interest rates and fees.
  • FDIC-insured accounts.

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Lynne wants a low-risk way to start earning money on her savings.

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Lynne wants a low-risk way to start earning money on her savings.

Invest

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Lynne wants a low-risk way to start earning money on her savings.

Invest

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Lynne wants a low-risk way to start earning money on her savings.

Invest

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Lynne wants a low-risk way to start earning money on her savings.

Invest

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Types of Savings Accounts

Financial institutions, banks and credit unions offer a variety of savings accounts.

Each of these accounts is insured by the Federal Deposit Insurance Corp. (FDIC for banks), or the National Credit Union Administration (NCUA for credit unions).

This deposit insurance means your money is safe even if the bank or credit union fails and has to close its doors.

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Find the best savings account for your situation and compare interest rates and fees. You can choose to use these typical accounts to save for the near future or for years down the road:

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Savings Bonds

U.S. savings bonds are a low-risk way to begin saving and investing.

Series I bonds are indexed for inflation. The earnings rate on this type of bond combines a fixed rate of return with the annualized rate of inflation.

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IDAs

Another savings option may be an individual development account, or IDA.

In some communities, people whose income is below a certain level also have the opportunity to open an IDA as part of a money-management program organized by a local nonprofit organization.

IDAs are generally opened at a local bank. Deposits made by the IDA account holder are often matched by deposits from a foundation, government agency or other organization.

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Training programs on budgeting, saving and managing credit are also frequently part of IDA programs.

Find out about IDAs by visiting this website at www.cfed.org/programs/idas.

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Lessons Learned

In this lesson, you learned about simple tools that can help you earn money on your savings. You also learned about several safe types of savings accounts and about IDAs.

Next you'll learn about investing — another set of tools that can help you build wealth.