In life, proper planning and goals tend to make things turn out better and go much smoother getting there. How you prepare financially for the future can make all the difference in your life. From short-term goals all the way to retirement, everyone should have an annual savings plan. In Overland Park, many people turn to Cornerstone Bank.
What is an annual savings plan?
You may not be familiar with the term, but an annual saving plan isn’t that complicated or difficult to understand. An annual savings plan is simply a roadmap to how much money you will set aside throughout the year.
According to U.S. News & World Report, a good goal for savings is 20% of your income each month, according to many experts. Don’t let this discourage you, though, if your current financial situation doesn’t allow you to set aside that much of your income. Any amount is better than nothing when starting out on an annual savings plan. In Overland Park, we advise our customers to start where they can, even if that’s only 5-10% of their income. The best part about savings accounts is that they grow over time through compound interest.
Related: Personal Savings Account Options
Compound interest is your friend over an extended period of time. As you earn interest in your savings, we add the interest to your account, which increases the interest paid by the bank as the account’s value rises. So whether you start out with a lot or a little, over time, your account will grow.
Everyone’s situation is different, and that is even more true for individual goals combined with the different stages of life one may be in. Keep reading to learn more about different goals for savings and the options we offer to get you there.
What are your goals for saving?
Different goals will have different timelines, which will determine the savings options that fits your needs best. Before we talk about the various account options, let’s take a look at timeframes for short and long-term goals that will inform your decision making.
Less than a year
We consider savings that are intended for less than 1 year to be short-term goals. Short-term goals can be anything from a vacation, to planning for the holidays, or even not fun, but very necessary expenses such as taxes.
Less than 10 years
Savings goals that are less than 10 years are longer term and can be considered more as a safety net for unexpected expenses that life often throws our way. This safety net will be there for you if a need arises. Life can come out of nowhere and hit you with a broken refrigerator or a large insurance deductible. This savings can also be there for the down payment on a house or to pay for a child’s braces.
More than 10 years
The biggest savings goal that you will be planning for is your eventual retirement. How you prepare now will determine the type of life you can live in your golden years. When done right, this will provide a comfortable life. You may be looking forward to spoiling grandchildren, traveling, or devoting time to passions you may not have had the time for earlier in life.
Related: Banking Terminology 101
What options do you have for an annual savings plan?
Now that we have established the types of goals you may save for, let’s look at the different options Cornerstone Bank can provide to put your annual savings plan in Overland Park to work.
Depending on your goals, you can take advantage of our personal savings accounts, certificate of deposits, money markets, and IRAs. Let’s take a look at the differences and advantages of these options.
Personal savings accounts
This is the most common type of savings account and is likely one you are familiar with. A personal savings account is the simplest and most accessible, so it is often used to store money you may need to access in the short-term. These accounts also carry the lowest minimum opening deposit.
How to open a savings account
Cornerstone Bank has made opening a savings account as easy as possible. With just a few pieces of information and an opening deposit, we can have your account started in no time!
What you’ll need
Before you start the process, these are the things we will need from you to get your account started:
- Full legal name
- Address
- Date of birth
- Social security number
- Driver’s license information (or another form of a government-issued ID)
- Minimum of $100 to deposit and open your account
Where to go
At Cornerstone Bank, we know life can be hectic. That’s why we make it easy to set up your savings account with flexible options. Whether you’d prefer to come in, stay home, or you’re busy on the go, we make starting an account fast and easy. You can open your savings account in a few different ways.
Online
We know life can be hectic. That’s why we make it easy to open a savings account online. With the information we’ve listed above and a few clicks, you can have your account up and running in no time.
In-person
Come in and meet a personal banker and put a face to the name that will be here for you if you ever need assistance. Your banker will get you all set up and provide you with their cell number so you can reach them whenever you need. Life doesn’t just happen during business hours. We want you to be able to reach us whenever you need.
Over the phone
We can also set up your account over the phone. So if you’d prefer to give us a call, one of our bankers would love to speak with you and get you going on the path to savings.
Certificate of deposit
Certificates of deposits (CDs) are examples of time deposits. CDs allow you to deposit money and watch it accrue interest at a higher rate than a personal savings account. The caveat is, you must keep the money in the account for the amount of time you agree to when opening the account to avoid fees. You can choose a timeframe that ranges from 30 days to 60 months. Whenever the term ends, you can either withdraw your money or renew your account for another term. So if you think you may need to withdraw funds soon, it may be best to deposit your money in a savings account rather than a CD.
What’s the Difference Between a Demand Deposit and a Time Deposit? →
How to start a CD
Setting up a certificate of deposit is very similar to a personal savings account and will require the same pieces of information. The main difference is the required deposit. To open a CD you’ll need to provide:
- Full legal name
- Address
- Date of birth
- Social security number
- Driver’s license information (or another form of a government-issued ID)
- Minimum of $1000 to deposit and open your account
Just like our savings accounts, we make it easy for you to open a certificate of deposit. You can choose to do so in-person, over the phone, or online.
Money Markets
A money market account offers similar benefits to a savings account, but you can also have access to your money via checks and debit cards like a checking account. The interest rate is a little lower than a CD, but if flexibility is important, this option may be a great fit for you. We should also note that the minimum deposit is also higher than a traditional savings account. This option is great for both short- and long-term savings as part of your annual savings plan in Overland Park.
Learn more about the benefits of a money market account. →
How to invest in a money market
Just like our savings accounts and CDs, we make it easy for you to open a money market account. We can get you started in-person, over the phone, or online. Regardless of how you open your account, you’ll need to provide:
- Full legal name
- Address
- Date of birth
- Social security number
- Driver’s license information (or another form of a government-issued ID)
- Minimum of $1000 deposit
Individual retirement account (IRA)
For your long-term savings strategy, an IRA is a great option for many of our customers. It is, however, something that should be well thought out and planned to maximize your success. Things such as how far you are from retirement and your budget will contribute to planning an appropriate strategy.
There are various options available in this type of savings plan, and we strongly recommend that you consult with your financial advisor to determine what is best for you. Once you have decided on a strategy for this part of your annual savings plan in Overland Park, we can help to get you all set up.
Related: What to Discuss with Your Financial Advisor for Retirement Planning
How to open a IRA
Just like our savings accounts, CDs, and money markets, we make it easy for you to open an IRA. Whether you prefer in-person, over the phone, or online, we can help. However you choose to open your IRA, we will need the following information about you:
- Full legal name
- Address
- Date of birth
- Social security number
- Driver’s license information (or another form of a government-issued ID)
- Minimum of $1000 for deposit
Michelle Guthrie, Executive Vice President, explains various types of deposit accounts:
The takeaway
No matter what stage of life you are in, it is never too late to start saving for your future. As a local community bank, Cornerstone Bank is committed to assisting our neighbors in achieving their financial goals. So whether you want to open a savings account, CD, money market account, an IRA, or any combination of these options, we can help!
Get started with Cornerstone Bank today
Since 2001, Cornerstone Bank in Overland Park, has put our customers first, and that means giving them the best that banking has to offer. Whether you choose to start your savings plan online, in-person, or over the phone with an associate, we are here to help you make the most out of your annual savings plan in Overland Park.
You can visit our website and quickly open an account online, in-person, or over the phone. Whatever you prefer, Cornerstone is here for you.