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Earning Interest, Reviews, Strategies to Save

Review of Live Oak Bank’s Deposit Rates

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Live Oak Bank’s savings account

When it comes to the savings accounts with the highest interest rates, Live Oak Bank is up there with the best.

APY

Minimum Opening Deposit

1.85%

No minimum

  • Minimum opening deposit: $0
  • Monthly account maintenance fee: $0
  • ATM fees: None
  • ATM fee refunds: None

Live Oak Bank has one of the best savings account rates available listed on our site. The bank is lowering the bar for entry into the high-yield savings account space with a monthly maintenance fee and minimum deposit of zero — for both. Allowing anyone to take advantage of these high interest rates, no matter how much money they have, certainly makes Live Oak Bank stand out amongst competitors that require much higher initial investments.

Live Oak Bank wants you to use your savings account, and use it often, which is one reason why it has no monthly maintenance fee. If there is no activity on your account for 24 months and your balance is less than $10.01, Live Oak Bank will take the remainder of your balance as a Dormant Account Fee and close your account, so keep up-to-date with transactions. One way to do this is setting up automatic withdrawals to ensure you never incur this penalty.

Getting money into a Live Oak Bank savings account from an external bank account can take a little bit of time, depending on how you do it. If you request the money through Live Oak Bank’s online portal, the funds won’t be available for up to five or six business days. But if you send the money to Live Oak Bank from your current bank, the money will be available as soon as it’s received. Your Live Oak Bank savings account will start earning interest as soon as the money posts to your account.

You can easily withdraw your money at any time via an Automated Clearing House (ACH) transfer. Simply log into your Live Oak Bank savings account and transfer the money electronically to any bank account you wish. The funds will be available in two to three business days.

You are limited to making just six withdrawals per month from this savings account. That’s not a Live Oak Bank thing, Federal law mandates certain types of telephone and electronic withdrawals, including transfers from savings accounts up to 6 per statement cycle. If you can’t wait until the next month to make a withdrawal beyond the six per month, you’ll be charged a $10 transaction fee for each additional action from the bank.

Live Oak Bank CD rates

Live Oak Bank also has some of the best rates on certificates of deposit (CDs).

Term

APY

Minimum Opening Deposit

6-month CD

1.90%

$2,500

1-year CD

2.15%

$2,500

18-month CD

2.15%

$2,500

2-year CD

2.20%

$2,500

3-year CD

2.10%

$2,500

4-year CD

2.10%

$2,500

5-year CD

2.10%

$2,500

  • Minimum opening deposit: $2,500
  • Early withdrawal penalty:
    • CD terms that are less than 24 months — 90 days’ interest penalty
    • CD terms that are more than 24 months — 180 days’ interest penalty

Live Oak Bank consistently offers some of the highest CD rates listed on our site. This bank’s minimum deposit requirements also seem to be right on par with other banks’ requirements. At the time of publishing this article, the best CDs out there have minimum deposit requirements both above and below Live Oak Bank’s $2,500 benchmark.

It’s a relatively straightforward process to open a CD. Simply complete the forms online, provide any needed documentation (such as your current bank account details), and wait for an account approval. Once your account is open, you can transfer your deposit, where it will be held for five days before officially launching your CD. It’s important to note that only U.S. citizens and permanent residents are eligible to open these accounts.

If you are able to resist the urge to withdraw your money early, congratulations! Your CD will automatically renew into a CD with the same term length. However, don’t panic if that’s not what you want: You have up to 10 days after the CD has matured to withdraw your money penalty-free and move it to another bank account.

If you need to withdraw your deposit early, you’ll incur a penalty. If your original CD term was for less than 24 months, you’ll be charged 90 days’ worth of interest. If your original CD term was for longer, you’ll be charged a higher rate — 180 days’ worth of interest.

Conclusion

Live Oak carries an “A” health rating according to our analysis and has a top-notch online banking portal as well as a streamlined app. It’s easy to overlook Live Oak Bank for other larger, more established consumer banks like Ally Bank or Discover Bank. That might be considered hasty, as Live Oak has some of the best CD rates around and one of the best savings accounts available on the market based on our site.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Strategies to Save

Best Money Savings Apps

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

best mobile apps
iStock

Saving money isn’t always as simple as the oft-prescribed “put it away and don’t touch it” advice makes it seem. With financial concerns constantly tugging at our attention, it can be difficult to find the time and money to save for future goals, events or the unavoidable emergency.

If the savings aren’t there when you need them, you may finance a purchase or cover an emergency with debt like a credit card or personal loan. In a pinch, those tools can be invaluable. But taking on debt should generally be considered a last resort, as carrying debt comes with its own risks.

Luckily for the tech-savvy, the fintech revolution gave rise to several mobile apps designed to help you save money — and make saving a bit more interesting, to boot. Read on to discover the best money savings apps to help you save for short term goals like a vacation, long term goals like a home or college education, and pad your all-too-important emergency fund.

Best money savings apps to help you save daily

Consistency is the root of wealth-building. That said, it follows that saving a little bit of money every single day can be a good practice to start building a wealth mentality. It also happens to be a great way to save money without feeling drastically penalized today to serve your future goals, since you can split your saving into small chunk sand meet targeted saving goals. The following money savings apps can help you get into the habit of saving a little bit of money every day.

Best for saving money on a tight budget: Joy

App Store: 4.3/5, Google Play: n/a
If you’re on a tight budget, the Joy app may be a great way to find money you didn’t think you had.

This free iOS app analyzes your income and spending habits and calculates how much money you can safely save each day without breaking your budget. The Joy app won’t automatically make the transfer for you, so you’ll have to open up the app and decide whether or not to save the money. If you say yes, the funds will be transferred from your linked account to an FDIC-insured Joy savings account.

You can also elect to save more or less than the amount suggested, as you can move money into your Joy savings account anytime. If you need a reminder, set up a daily notification to remind you to make the transfer.

When you’re ready to spend your savings, you can transfer the funds from the Joy savings account to an external account.

Another popular app, Digit, deserves honorable mention. Digit calculates how much you can save each day and will make the transfer for you, automatically — however, Digit costs $2.99, so it may not be a viable option for those on a tight budget.

Best for saving up an emergency fund: Chime Banking

App Store: 4.7/5, Google Play: 4.4/5
Standard financial advice suggests keeping three to six months worth of monthly expenses stashed away in an emergency fund, just in case you run into a financial emergency. In reality, however, around 40% of Americans report they aren’t able to cover a $400 emergency out-of-pocket, while the average U.S. monthly household expenditure is about $5,005.

Chime, a mobile-only bank, hopes its app’s automatic savings features may just help you beat the status quo and make it a little less painful to finally build up your emergency fund. The Chime app is free and available for both iOS and Android devices.

When you enroll in direct deposit and Save When You Get Paid, Chime will automatically transfer 10% of each paycheck into a seperate Chime savings account for you. If you’re enrolled in Chime’s automatic savings program, the bank will also automatically round up each transaction made with your Chime Visa debit card and deposit the amount into your savings account, too.

Best for saving money for a vacation: Tip Yourself

App Store: 4.6/5, Google Play: 4.4/5
Tip Yourself is a free app that may help you save for your dream trip. With the Tip Yourself app, available on iOS and Android devices, you can reward yourself for positive behavior by transferring a little bit of money to your digital tip jar each time you accomplish a personal goal.

If you make it to the gym on a Tuesday, for example, tip yourself $1 (or whatever amount you feel you deserve). The same goes for every other personal goal you may have, such as getting to work earlier or calling your parents once a week.

The app aims to help its users build savings habits and motivate them to stay more consistent about their personal goals, too. The app also has a social feed, so you can share your wins — big and small — with your peers in a supportive community. If you’re into maintaining a streak, there is also a calendar that keeps track of the days you did tip yourself.

With Tip Yourself, you can set a savings goal for your next vacation. When you reach your goal, you’ll feel confident taking a vacation knowing the money you’re spending is your reward for keeping the promises you made to yourself.

Best money savings apps to help you save monthly

Saving money on a monthly basis for large goals doesn’t have to come down to what’s left over at the end of the month. And it won’t, if any of the following money savings apps have anything to do with it. The apps below encourage users to set aside the funds when they have them, before the money is absorbed into their monthly expenses.

Best for saving money for a car: Qapital

App Store: 4.8/5, Google Play: 4.5/5
A car is a fairly large savings goal to meet, but it can seem less daunting if you can save a bit toward your vehicle each time you are reminded why you need the car in the first place — that’s where Qapital comes in.

With Qapital, you can set customizable autosave rules for just about anything, so you can save money simply with the actions you take living your life. You can set a custom rule; for example, you can save a certain amount of money each time you pay for a public transit ticket or fill up the tank for that friend who drives you to work.

Qapital has a bunch of other ways to help you save up for a car, too. With the round up rule, the app will round up all of your transactions and automatically transfer the difference to your designated goal account. So each time you pay for anything, you will have a little bit of money going toward your car. The spend less rule saves whenever you spend less than a certain amount with a retailer or in a certain spending category, and the guilty pleasure rule saves a certain amount whenever you spend on a chosen guilty pleasure, like ordering takeout.

When your goal is funded, you can withdraw the funds and spend it on your chosen vehicle. The free Qapital app is available for both iOS and Android devices.

Best for saving money for a child’s future: Kidfund

App Store: 4.8/5, Google Play: n/a
Whatever your child’s future holds, having the money on hand to help them accomplish their goals will come in handy. With Kidfund, not only can you contribute to your child’s future success, but so can your family, friends and anyone who supports your child’s dreams.

You can open a dedicated savings account for each of your children and set a rule to gift money to your child’s account on a periodic basis. For example, you can gift each of your children’s Kidfund accounts $20 each month. Kidfund awards interest based on the balance within the account.

On top of your giving, you can invite your friends and family members to follow your child’s Kidfund account and they can gift money to the account for birthdays, holidays or whatever reason. When the time comes, you’ll have the money waiting in the Kidfund account to fund your child’s dreams.

Kidfund is a free social savings app available only on iOS devices.

Best for saving money for the holidays: Simple

App Store: 3.8/5, Google Play: 4.2/5
Simple is a mobile-first bank that helps you set aside money for future goals. With a fee-free Simple account, you can set and fund financial goals with a target date. Simple will then calculate how much money you need to transfer periodically to reach your goal by your specified target date, based on the frequency you set.

For example, you can set a goal to save $500 for holiday shopping over 10 months and set the frequency to transfer an amount each month. Simple will automatically set aside $50 each month so you’ll reach your goal for the holidays.

The money for the goal will remain in your Simple account, but will be set aside and tagged for that specific purpose. The amount designated toward the goal will be deducted from your total to give show you how much money is safe for you to spend. The Simple app is free and available on iOS and Android devices.

Best money savings apps to help you save in the long term

Saving for long-term goals can be difficult when you can’t see the tangible results of your efforts just yet. Using one of the money savings apps below may help you keep track of the progress made toward your savings goal, so you can stay motivated as you wait, save and watch the investment you are making towards your future grow with time.

Best for saving money for a house: Rize

App Store: 4.2/5, Google Play: 3.7/5
Rize is a free automatic savings app available for both iOS and Android devices. It helps you earn extra money on your savings for a long-term goal (like a home down payment) and offers a high APY on your cash savings. You also have the option to earn even more on your savings by investing the funds. You set a goal amount and how often you want Rize to pull a specified amount of money from your account, and the app will do the rest of the work for you.

You can set investment or cash savings goals. The money saved in a Rize account earns interest on cash savings. If you choose to invest your money, it’s put into exchange-traded funds which earn varying interest rates.

Rize doesn’t charge any fees on your cash savings or require a minimum amount to open an account; instead, it lets you decide how much you want to pay. If you invest your money, Rize asks you contribute a minimum $2 per month to your account and pay an annual 0.25% management fee of your invested assets.

Rize also has a few built-in features to help you reach your goal a bit faster. It calls the features “Power Ups,” and you can turn them on or off at any time. You can use the Accelerate feature to automatically increase your contribution by 1% each month. So if you are saving $100 toward your down payment this month, Rize will increase your contribution to $101 the next month.

Rize also has a Boost feature that calculates how much extra money you have based on your income and spending habits, and automatically transfers up to $5 to your goal whenever “it makes sense,” which Rize says is about once or twice a week.

Best for saving money for college: Clarity Money

App Store: 4.7/5, Google Play: 4.1/5
Clarity Money is a free automatic budgeting and savings app available for both iOS and Android devices. The app helps you save by setting rules for how often and how much you want Clarity to automatically stash away for goals, like paying for next semester’s tuition or funding your child’s college savings account.

Clarity Money also has a few other features that may help you find more money in your budget to save for school fees. The app can analyze your expenses to find where you may be able to cut back on subscription services and free up some of your funds. Its budgeting features display your spending habits and let you know when you are going over your intended budget in a category, so you can adjust your spending behavior before you overspend. Clarity Money does not charge any fees for its services.

Best for saving money for retirement: Acorns

App Store: 4.7/5, Google Play: 4.3/5
Acorns is an investing app popular for letting its users invest the spare change from their daily transactions with its Acorns Core option. With Acorns Core, the app automatically rounds up your transactions to the nearest dollar and invests the difference into your chosen investment portfolios (once you’ve reached a minimum $5 in roundup savings).

Acorns also has a retirement savings feature called Acorns Later. With Acorns Later, you can invest your money in an Independent Retirement Account (IRA) and set recurring contributions from your linked account. You can invest using a Roth IRA, Traditional IRA or SEP IRA. The ETFs in your investment portfolio will automatically adjust to fit your needs over time based on your retirement date and goals. You can’t have Acorns Later without have Acorns Core, and having both costs the user $2 per month. Acorns Core only is $1 per month.

The Acorns app is free and available for both Android and iOS devices, but the Acorns service costs $1, $2, or $3 (with the Acorns Spend checking account) per month depending on what plan you select.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Strategies to Save

Why Do You Need an Emergency Fund?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Building an emergency fund needs to be one of your core personal finance goals. Unemployment, serious medical problems, divorce and other unexpected life emergencies can all crop up at the worst possible times — and when they do, you’ll be ready for them if you have a well-stocked emergency fund. In this guide, we’ll explain how to build an emergency fund, how much you need in your fund, where to keep it, and when to use it.

What is an emergency fund?

An emergency fund is a sum of money that you set aside to pay for serious, unexpected financial emergencies. Your emergency fund helps you avoid relying on expensive forms of debt, like personal loans or credit cards. While you can’t always anticipate the unexpected, you can prepare by having an emergency fund ready to go.

An emergency fund should be reserved for major, unplanned situations that could disrupt your life. The costs incurred in these situations stem from serious, longer-term events. Some common scenarios could include:

  • Large, unexpected medical bills from chronic illness
  • Major car repairs or medical expenses after an accident
  • Paying for living expenses in the event of job loss or divorce
  • A major unplanned emergency home repair

Note that an emergency fund is different from a rainy day fund. A rainy day fund is meant to handle smaller one-off expenses that are somewhat predictable, such as routine home maintenance, broken appliances, last-minute travel expenses or the like. You would expect to be paying expenses out of a rainy-day fund with a certain regularity, several times a year.

Your emergency fund needs to be something you hope you never have to use. Think of an emergency fund as more of an insurance policy than a supplement to your regular budget.

How much should I save in my emergency fund?

Deciding how much you should save for an emergency fund isn’t a one-size-fits-all answer. A good rule of thumb, however, is to cover your financial needs for a set amount of time based on your income and living expenses. The amount that’s best for you will depend on your individual circumstances.

For example, a single-income family of four will likely have different financial needs than a dual-income family of two, as would a person with a full-time job and someone who’s self-employed. Consider these different months-of-income size funds.

3-month emergency fund

If you are single and have a steady job, saving three months worth of your income can work well. You only have yourself to worry about, so it’s only your living expenses that will need to be covered, rather than those of a spouse or children. This size fund can also work for a dual-income family that can rely on a single income in case one person suffers a job loss.

6-month emergency fund

Those who have a spouse and children will likely need to save more money than those who are independent. Six months should cover the costs for those who are married with a stable income and have young children living with them, especially if the household has a single earner. This size fund is also recommended if someone in the family has a chronic medical condition that can incur frequent visits to the doctor or hospital.

9-month emergency fund

Anyone who is self-employed or has infrequent income, such as a freelancer or commission-only salesperson, can benefit by saving more than those who have a stable income — nine months is a good go-to target. This way you’re able to pay for any unexpected emergency as well as the loss of a client or project or a lull in income.

How to build an emergency fund

Whether your account should hold three months worth of expenses or more, saving money for an emergency fund can seem daunting, especially when you are first starting out. Just like any form of saving, though, you can use a few easy strategies to help build your momentum and your balance.

  1. Make your emergency fund a priority: You have more than one financial goal, but it’s important to treat building your emergency fund as your first priority. Start saving immediately, and set aside working toward your other financial goals until after you’ve reached your target emergency fund amount.
  2. Pay down debt: One exception to the rule above is if you have a high debt load — if so, make a goal of paying it off as fast as possible. It can be difficult to find extra money save when you have a sky-high credit card bill every month. Think of debt payments as a form of savings — you’re saving all of that interest by paying it off quickly.
  3. Review your budget: Get some traction on building your emergency fund by reviewing your budget and cutting discretionary expenses, such as dining out or buying new clothes. If you aren’t doing so already, consider using the 50/30/20 rule to grow your savings. Reserve 50% of your after-tax income for needs, 30% for wants and 20% for saving. Sticking to this formula can keep you on track to build your emergency fund rapidly.
  4. Find extra money: Expecting a bonus or a tax refund? Put it directly into your emergency fund instead of spending it elsewhere. Perhaps you’ve got items around the house that you no longer use and can sell? Having a lump sum can make a big impact on your balance, freeing up cash from your paycheck for other financial goals.
  5. Automate your savings: Set aside the same amount every month in your emergency fund. Make it easy by scheduling automatic transfers to savings from your paycheck. The online bank Chime offers a program that automatically transfers a percentage of each paycheck that you define into a seperate Chime savings account for you.

Where should I keep my emergency fund?

There are three key factors to keep in mind when choosing an account in which to keep your emergency fund: liquidity, yield and security. Liquidity means ease of access to your money: you should be able to get cash out of your emergency fund on very short notice. To maximize growth of the money you have saved, you’ll want a competitive interest rate on the account. And security means there’s little chance you’ll lose any money on your investment.

Taking liquidity and yield into account means that some accounts are better choices than others to hold your emergency fund. When it comes to security, it’s best to consider deposit accounts insured by the Federal Deposit Insurance Corporation (FDIC) up to the legal limit. Let’s take a look at four deposit account options: cash management accounts, savings accounts, money market accounts and certificates of deposit (CDs).

Save your emergency fund in a cash management account

Cash management accounts typically combine the higher yielding interest rates of some savings accounts and CDs with the convenient liquidity of a checking account. This makes them an ideal account type for your emergency fund.

Keep your emergency fund in a savings or money market account

The best high-yield savings accounts pay a high rate of interest, making them a good place to keep an emergency fund. Money market accounts are a type of savings account that offers attractive interest rates, but typically require a relatively high minimum balance to earn interest. It’s not hard to find money market accounts and saving accounts that come with debit cards and even checks, providing better access to your emergency fund. One thing to be aware of: the Federal Reserve’s Regulation D limits “convenient” withdrawals — such ATM transactions — in savings and money market accounts to six a month.

Are certificates of deposit a good place for your emergency fund?

CDs are term deposit accounts where it’s possible to get an attractive rate of interest, in exchange for agreeing not to withdraw your money for a certain period of time. You may close a CD and get your money back at any point in its term if you need to, but you generally will give up some or all of your earned interest as a penalty.

This factor makes CDs a less attractive choice for your emergency fund. Possible ways to mitigate this include using no-penalty CDs or building a CD ladder. No-penalty CDs usually have lower interest rates than conventional CDs, but you may make either partial withdrawals or withdraw the entire amount at any time over the course of the CD’s term penalty free. With a CD ladder, opening CDs of different terms provides you with a predictably stream of maturing CD income, although this is still a lower level of liquidity than other deposit account types.

Is a savings account the best place for my emergency fund?

A savings account can be a good option for an emergency fund because there are many options that pay decent rates of interest, they’re relatively liquid accounts, and they carry FDIC insurance. Your best bet when looking for a savings account is to check out online banks. Find an account with an ATM card or check writing privileges.

Savings account pros

  • FDIC insured up to the legal limit
  • You can deposit as much as you want, without restrictions
  • You can make six “convenient” withdrawals from your account a month without penalty
  • Online savings accounts offer competitive rates
  • Many savings accounts come with a debit card and allow for check-writing abilities

Savings account cons

  • Interest can be lower than some other options, like CDs
  • Savings accounts at traditional banks offer rock-bottom interest rates
  • May get hit with excessive transaction fees if you make more than six withdrawals from the account a month

When should I use my emergency fund?

Here’s a good rule of thumb to decide if an expense is an emergency: Ask yourself whether it’s unplanned and uncontrollable. True emergencies that are both unplanned and uncontrollable are things that materially impact your health, wellbeing or ability to earn a living.

One-time expenses like a great deal on a vacation package, that big-ticket gift you’d love to get your spouse, or paying for sleepaway camp for your kids are all the opposite of emergencies. Deciding how to pay for things like this, no matter how expensive, is part of your regular budget planning process.

Regular expenses that are not surprises, such as paying your property taxes or insurance on your car or home, are not emergencies. These bills may be large, but at the end of the day they are predictable expenses that should be part of your regular budget planning process.

Losing your job to a layoff or coming down with a life-threatening disease are the very definition of emergencies. These are the reasons you have an emergency fund: Peace of mind for the worst that life can throw at you.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.