Students: A Way to Increase Your Summer Income

Most college students are always strapped for cash. The summer job fund always seems to run out at the worst time during the school year. An easy way that college students can accrue more money on their savings is by just realizing what is available for them at banks. Almost all banks offer Certificates of Deposits (CD’s), which are very similar to your regular savings account. A CD accrues interest just like your regular savings account; the key difference is that when you purchase a CD, you are committed to hold onto the CD for a certain amount of time. They have CD’s spanning from 3 months, 1 year, to even a 5 year span. 

Certificates of Deposits usually come with a fixed interest rate, so if the interest rate rises or falls your CD will not be affected. The fixed interest rate allows you to know what exactly your earnings will be once your CD reaches its maturity date. Students especially should really take advantage of this type of opportunity because with the economy in a state of unstable interest rates, the CD offers protection against the fluctuation of interest rates and typically allows for more interest to be earned on your savings. An easy way for students to create a plan that will work is to spread out the funds you earned over the summer. It would be wise to keep some of the money earned in the regular savings account, to have at your disposal in time to purchase books, food, and the numerous expenses that involve being a college student. With the other portion of your earnings, one should purchase two or more CD’s. This may sound like a large investment but it could pay substantial dividends.

The longer it takes to reach the maturity date, the more interest will be earned on your CD. If a student purchases a 3 month CD along with a 1-year CD, they will be able to earn some guaranteed interest in the short run as well as having money stored away for a higher earning on interest in the year CD.  That way when the spring semester rolls around the money you invested in the 3 month CD will be at your disposal while still earning a fixed interest rate on the year CD. This is just one way a college student can try to stay ahead in the current economic state of the United States.