Personal Finance Tips
Many banks offer automated savings programs that help you add to your savings account using your spare change. Programs such as Keep the Change from Bank of America or Way2Save from Wells Fargo will round up your debit card purchases to the nearest dollar and put the extra change in your savings account. However, typically savings accounts have a close to zero percent interest rate, which does not allow your spare change to grow.
Luckily, there are new technologies that are helping your spare change work a little harder. Acorns, a new app available for iPhone and Android, is helping to take your micro-transfers a little further by investing them in low-cost index funds. After linking the app to one of your accounts, typically a debit card, the app will monitor your expenses to find where it can round up your spending. The app will work to round up every transaction to the nearest dollar and set the change aside in your checking account. When the total amount that is saved reaches $5, Acorns will deduct the money from your account and will fund your investment account.
The funds that are put into your investment account are used to buy six exchange-traded funds in a portfolio that will match your preferred risk level. All the accounts are SIPC insured, just like those that are available through an online discount brokerage.
While it may seem like a much better way to start saving your spare change, Acorns does come with a fee. You will have to pay $1 per month if your savings account is under $5,000 and .25% per year once your account reaches more than $5,000.
Along with choosing the right investment options, having the right insurance policies in place can help to keep your personal finances safe. Contact Aimpro Insurance in Phoenix, Arizona for all of your insurance coverage needs.