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married couple saving for their wedding fund using CDs savings
Personal Finances

How to Use a CD to Save for Your Future Wedding 

Planning a wedding can be a thrilling milestone but also one of the costliest with the average cost of a wedding being $27,000-$30,000. Setting aside funds well in advance is key to covering expenses without straining your budget. One smart savings strategy a couple should consider is using a certificate of deposit (CD). 

A CD is a type of savings account with guaranteed returns over a set period. After completing the CD’s term length, you deposit a lump sum upfront and earn interest at a fixed rate. CDs offer a secure way to grow your money while building discipline and commitment to your financial goal. 

With some strategic planning, a CD can help you steadily build up a wedding fund. Here are the key benefits of using a CD for wedding savings to maximize your earnings. 

The Advantages of CDs for Wedding Goals 

CDs provide an ideal vehicle for wedding savings in three key ways: 

Guaranteed Returns 

With a CD, you lock in a specific interest rate for the term of your deposit. This way you can easily calculate the wedding funds you’ll save based on the amount invested, time frame, and guaranteed rate. Your high-yield savings account shields you from market instability, unlike stocks and other variable investments. 

Low Risk 

Investing in CDs involves relatively low risk compared to many other investment options. Your original deposit is FDIC insured up to $250,000 per depositor, per bank. As long as you hold a CD to maturity, it’s a guarantee to get your money back plus the accrued interest. This safeguards your wedding savings. 

Discipline and Commitment 

CDs require a deposit that you cannot touch for a predetermined period. This often ranges from a few months to up to 5 years. This structure promotes discipline and commitment to consistently building your wedding fund over time. Automatic transfers into your CD account make the process even smoother. 

Here are the steps to start harnessing the power of CDs for your wedding savings: 

  • Research banks and credit unions to find the best CD interest rates and terms. 
  • Open a CD account with an initial deposit and set the length as three years. 
  • Establish automatic recurring transfers from your checking account into the CD. 
  • Monitor your savings progress over the CD’s term. 
  • Renew the CD or invest the balance into a new one when it matures. 

Maximizing Your Wedding CD Savings 

Getting the highest possible returns on your wedding CD requires planning and savvy decisions. Here are some tips to optimize your earnings potential: 

As we mentioned, it all starts with finding the best CD rates. Compare offerings from online banks, credit unions, and traditional brick-and-mortar institutions. Every little bit of interest you earn will compound and grow your wedding fund. 

Next, consider using CD laddering to give you flexibility. Open CDs with different maturity dates to withdraw savings early without penalty for all your nuptial needs. Reinvest the rest to keep earning interest

Also, resist the temptation to withdraw your principal or earned interest early. Paying penalties will diminish the returns.

When you save or invest your money, you are essentially putting it to work for you. The longer you can keep your money invested, the more time it has to grow and potentially earn more money. This is why it’s important to let your money keep working for as long as possible. Especially with higher-yielding CDs that will provide you the best guarantees.

Finally, at maturity, roll the entire CD balance into a new one. This maintains your discipline while allowing compound interest to boost your savings even more. 

The Perfect Way to Save for Your Wedding Day 

Saving up for a dream wedding is not an easy task and requires much patience and dedication. However, you can make this process easier and more secure by leveraging the benefits of CDs.

CDs are a safe and responsible way to save money over time. They help prevent the temptation to spend it before it’s due. With a little planning and discipline, you can use CDs to help you save up for your dream wedding and make it a reality.

Learn more about how CDs work, and consider opening one today to start building your future wedding fund while cutting costs. Follow these smart saving strategies, and you’ll be well on your way to walking down the aisle! 

Learn more about our financial services at amerantbank.com and follow Amerant on Facebook, Twitter, Instagram, and LinkedIn @AmerantBank for tips and new offers. 

Editorial Team
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