A bit of monetary advice, please.

[ralerin]

I'm currently saving for a trip to the UK. Boyfriend has been here 3 times and I've not been to the UK at all, so I'm sort of overdue. I'm looking forward to it even though it's ages away. (It'll be my first time flying internationally...first time flying since 2002. I've not got any details planned out, because I want to have the cash in my hand and know I am going before I pin anything down.) I estimate I'll need $3000 to make the trip, including airfare, hotel and food/spending money. I've been pulling $50 out of my paycheck every other week since May, and have dumped all the graduation and extra money I've received into a locked cash box. I'm...not even close to my goal, let's say that.

Would it be a better idea for me to set up a temporary CD at my credit union and set up a direct deposit into that instead? And by temporary I mean with a maturity date in about a year. I want to get to the UK faster, because money in a box earns me no interest. Should I shop around for a high yield savings account? What do most people here use?

[Whiskey]

I dont think 1 year in either form is going to net you any real interest. I looked up a local credit union and their rates are like .70% (and your daily balance has to be 250K to get that). Every other savings account is at .25% and requires you keep a minimum of 2500$ in the account at all times.

I am not the most knowledgeable in this area though. 1 year in savings just doesnt seem long enough. I believe CD's cost money to cash out, as well? CD's here have a .70% APY for 1-3k for 1 year.

edit: found something, "A sampling of several institutions shows that you’d pay 30 to 90 days of interest on CD’s that have less than a one-year term." If you have a seperate "emergency" savings account, a 1 year CD is better than nothing. I'd just be nervous not having access to that money if something happened and having to lose some of it if i needed it.

[MaggieTheCat]

I think Whiskey's right when she says it's not really worth it. I had a bunch of money saved up in a money market account (similar to a CD) and I think I gained something like $20 or $30 in a year, and that was with $8000+ in the account. $20 is better than none but it's still not much. And with CDs, you do have some kind of early cancellation fee if you want to withdraw the money before the term is up. At least at my bank you do.

[Evil Queen]

Your best bet would probably be to set up an online savings account. I have one with ING Direct and, right now, am bringing in 1.10% APY. Their Orange 1 Year CDs are 1.0% APY. It's not much but if you leave it alone it racks up. The interest is deposited monthly into your account and only costs a dollar to open [a savings account].

So far you've saved.... 800 dollars? Not bad, actually. Particularly if you have been diligent about saving it and not spending it.

However, I have several savings accounts;
Bank Savings Account (BoA) (for spending)
ING Orange Savings (for college)
ING Roth IRA (for retirement)

You just have to pick the one that is best for you. I don't like CDs because you can't get into them without paying a penalty unless the CD matures.

[BookstoreEscapee]

My bank has savings accounts you can open to save for a specific thing (like a Christmas Club account). Probably not any better interest than a regular savings account, but at least it puts the money somewhere separate so you're less likely to dip into it. You can probably get a 6 or 12 month CD, but the interest probably won't be much. Then again, nothing is going to get you much in interest in that time frame; even so, any savings account gets you a better return on your money than cash in a box.

[csquared]

First, get it in a bank so it doesn't get lost/stolen.

You can put the money you have in a CD (6 month/1 year), but the rest you save won't have enough time. In the end, you might make $10.00. You can't make much money with that little in that short a time period. Not worth beating your head against the wall for that.

ING Direct has one of the best interest rate you will find on a savings account. A friend was bragging that USAA was better, if you have the military connections to be accepted.

Enjoy your trip!