Match your goals with the right short-term savings options. Many of us are saving for something over the next few years. Perhaps you’re getting married, buying a house, planning a big vacation or simply putting money aside for a rainy day. 

Whatever your short-term savings goals, it’s important to understand how different accounts and tools can help you reach them.

Start with your short-term savings account options

1. Regular savings accounts: These basic accounts allow you to easily access your money anytime—online, through your phone or via an ATM. There is generally either no minimum balance or a low one, plus you earn interest. These types of accounts are a good option for savings you’ll need soon.
2. Money market savings accounts: These accounts generally earn a higher interest rate than checking or regular savings accounts. They typically require you to have more money in the account to avoid fees. Like regular savings accounts, access is easy. Money market savings accounts are a good option if you already have money saved and want a higher interest rate.
3. Certificates of deposit (CDs): CDs generally offer a higher rate of interest than regular savings or money market deposit accounts; however, your money will be tied up for a set period of time—9 months, 12 months or even longer—and there will likely be a penalty for early withdrawal. CDs are good for larger expenses down the road.

Regular savings accounts, money market savings accounts, and CDs are all FDIC-insured up to the applicable limits.

Create a plan

You don’t have to pick just one account. To start, look at the different terms and interest rates. Take note of balance minimums to avoid fees, and for CDs, check the length of terms. Think about liquidity, too. Federal law limits the number of account transfers and withdrawals at six per month for regular savings accounts and money market savings accounts. Knowing all of this, you may be able to mix options to save for a short-term goal.

For example, say you’re saving for home renovations that you plan to begin in two years. You decide to use a CD. In two years, after your CD matures, you may consider transferring your funds into a regular savings account. This would allow you to easily access your savings without putting them directly in your checking account, where you may be tempted to spend them.

Beyond picking which accounts to use, you may also want to create a plan for where to find additional funds in your budget. There are a number of different ways to cut spending, from small changes you make every day to review your monthly bills. Knowing these spending shifts are helping you save for a short-term goal can motivate you, since you’re working toward something

Make saving automatic

The Federal Reserve reported in 2015 that nearly half of Americans would not be able to raise $400 without selling something or borrowing money. This may be because saving money, even if you know where to cut, can be a challenge. Consider setting up an automatic transfer from your checking account to your savings account each pay period, or arrange for a portion of each paycheck to be deposited directly into your savings account. You’ll build your account balance without having to think about it.