Bank & CD Accounts
Non-Qualified (Non 401k) Plans

Bank & CD Accounts

If you put your money into the bank you should be aware that the FDIC insures only $250,000 of your money if you are single and $500,000 if you are married. Basically, the bank cannot guarantee your dollar is safe outside of this framework. Moreover, that is neither enough to compete with inflation, nor is it enough to retire on. 

High Yield Savings Account
There are a few banks that can offer a high interest yield – anywhere from 3.75 – 6%. However, it should be noted that such accounts are rare, and there is red tape. For example, in some accounts you may only earn 5% on an account under $5,000. The bigger your balance, the less your percentage. Either way, the purpose of a High Yield Savings Account is by no means a method for building wealth nor protecting it, especially given the limited FDIC insurance noted above. 

CD Account
Where there is no limit to the amount that you can contribute to a CD, there is certainly a limit to how much interest it earns – an average of less than 1%!  That doesn’t even beat inflation! Moreover, you will have taxes to pay on it upon withdrawal. If you save too much, you’ll get taxed way too much. If you save too little, you’ll have defeated the purpose of having a separate savings account for emergencies only. 6 months supply of savings – and that’s it for this account.