We all want a safe spot where your money can grow, and earn a high yield. The best apps to set aside money for a special purpose allow you to do all three with extreme ease. Mobile apps have made it easier than ever to begin earning a yield on your money, but with all the options in the app store or google play store where do you begin? How can you make the most efficient use of your time and make sure you are downloading the best apps to set aside money for a purpose.
Setting your savings aside to do something needs to be done in a safe, secure, and trustworthy place such as a bank, or some type of cash management solution with coverage. The majority of people are not thinking about earning the highest return on the money you set aside for a future purpose.
The best apps for setting aside money are on mobile. Mobile apps give you ease of access and ways to use your cash in ways you couldn't 10 years ago. The apps that are dedicated to setting your money aside are each slightly different.
When you break down savings we feel you need to keep in mind 3 things.
A lockup period is some period of time where the user can not withdraw their money from the app or investment vehicle. This is a common downside of using a bond as a way to save cash. When you need it, you will be penalized or you will only be able to withdraw under certain circumstances.
CD accounts are very similar to a bond, they have a lockup period and offer a rate based on the amount of lockup and risk you decided to take.
APY is the amount of yield you receive from the money you are setting aside. Oftentimes people will say that the app with the highest APY is the best app for setting aside money. However, if the risk is too great for your personal taste then the app might not be for you.
There are plenty of ways to define risk. In the example we are focussing on, setting aside money risk should be associated with the principal moving up and down. When you are looking for your money in a pinch it’s important that you can get at least the same amount reliably.
This is a list of the best apps to set aside money for a special purpose. Each of them are are unique in their own way. Some of them have different ways to earn, and methods to go about doing so. One strategy might work better for one person than the next. It is important to keep an open mind when you look at any new savings or money making opportunity. Keeping in mind the three big pillars we spoke about above, lockup, APY, and risk. The best apps to set aside money for a special purpose will be the one that fits your own criteria.
Outlet is a new and interesting way to save your money. At Outlet we are dedicated to building a platform that makes your money worth saving. We want to make it easy to not only set aside, but earn a yield on your savings.
Giving people the savings optionality that they want to have means a lot to most users who have never had this type of financial freedom, or who have only been exposed to traditional savings accounts. Although these products are great for a certain user profile, it is bad for another.
Outlet has paid users over 20% APY in the recent months, while banks have not done something similar in America since the 1980’s when interest rates were at all time highs. No traditional savings app has similar returns.
Outlet even has very similar traditional finance features such as coverage, and ach transfers. A few people who have been using the app have mentioned that the app feels like a bank account extension. This extension serves as a bridge that moves money from your lower interest savings account into an alternative higher interest rate one.
The reason why Outlet is preferred by most users over a CD account or bond is that Outlet does not have any lock up period. You can withdraw whenever you want.
Fundrise is a popular way of saving and setting aside money for some sort of purpose. People who use this app like it because it allows you to invest in real estate in “hot” markets. These markets are rich and attractive for people outside of the state they are in, or people who genuinely like the idea of investing in real estate.
There are some cons to using real estate as a savings tool. Using a real estate app to set aside money for something special might be a problem due to liquidity. You might not be able to withdraw your money when you want it most. After doing some brief searching, real estate investing apps such as Fundrise suggest that you use their app for roughly 5 years.
5 years can be a long time, and even then when you need the money you might not be able to withdraw it. If you are the type of person that wants full control over their money then perhaps fundrise is not for you.
Robinhood is an excellent app. Robinhood has a unique value proposition. A free to use and trade stock exchange. This can be a great solution for people looking to save their money long term. As long you make the correct decisions there is no reason why you can not see a handsome reward. Even holding a simple ETF yielded around 30% in 2019.
Using stocks as a savings account can be a bit tough. When you watch your savings swing every day, it can get emotional and you might feel like selling. This type of behavior will cause you to lose money. A common misconception of the stock market is that traders make the most, or a lot of money. This is not true, most traders do not beat the market. Which means you are most likely better off holding stocks rather than trading them.
As someone looking for a savings product, I would suggest that you go and find a stock that you like and treat that company or fund as your savings account. This would mean heavily investing in a few or perhaps a single company.
The positive side to using stock apps to set aside money is because it allows you to sell whenever the market is open. Which allows you to have easy access to your money. Unlike some other options on this list.
Beam is a cool app that allows you to set aside your money in an app that has the same type feel and earning method that a typical high interest account would have. However, beam has a special approach to savings accounts as a whole. People who use these beam accounts are able to earn more than what a traditional bank account would pay you for a short period of time if you refer a friend.
Referring friends is how you make this app worthwhile using. There are plenty of options on the market. The best apps to set aside money for a special purpose make it simple for you to earn the best yield, instead of relying on your friends to earn you a higher yield for a day or two.
Savings accounts are some of the best options out there when it comes to safety. Using a mobile banking savings app to set aside money is a great idea if you are only worried about safety.
Traditional savings accounts fall short in terms of yield, but have very high liquidity, as well as safety. Which is all certain people care about. There are other options that allow you to earn a yield with similar safety in terms of principal risk. Outlet would be a good example.
Stash is another one of these savings apps to set aside money for a special purpose. The purpose can depend entirely on you. Money can be saved in a few different ways using the stash app.
Stash is a great app for those looking to get ahead in one capacity or another, although its main value is around investing and not pure savings, it can be used as another account type to make money with depending on your financial plan.
When you think about how to set your money aside it’s important to keep an open mind in how you do so. There are plenty of people who set aside their money in all sorts of alternative assets, or investment vehicles that are not ordinary.
One of our personal favorite alternative investment niches is magic the gathering . Using magic the gathering as an example, people are finding undervalued assets everywhere. Magic the gathering has whats known as card sets, when an old set is finished printing, those cards tend to be worth more because no new copies of the cards are created.. There are several communities that have similar opportunities in their niche. One of the experts in this is a youtuber named Alpha Investments that makes a lot of money just investing in magic the gathering cards.
There is no wrong or right way to set aside money and watch it grow or at least having it maintain its USD value. People who have found this type of way to save prove that there is no right way to save your money.
Setting aside money for the future is most likely best done in cash using an application in most situations, however if there is any reason why people would like to invest in some type of an item or hold their cash in another asset class such as real estate, gold, silver, or even magic the gathering cards.
Setting aside your money for a specific purpose is important. When you set your money aside it’s important to think why you are doing so. This answer can drastically change the problem you are trying to solve. Setting aside money for x is much different than setting aside money for y.
Depending on what you are saving your money for can drastically change the product you end up using. Optionality is an important factor when picking the best app to set aside money for a specific purpose.
Setting aside money for your property taxes can be a tedious thing. It is important that you set aside what you need in order to pay your taxes. The issue is there are so many ways to set aside money. With all the different products on the market you might not know where to begin.
There are some states that provide different payment plans. Plans that include month to month, bi annual, or even yearly. Each situation is a bit different. If you have a yearly payment plan then you should think about how you can earn a yield on that money safely so that you can make sure to have it when the time comes.
If you are making month to month payments like the majority of people keeping it in cash is fine. Meaning using your traditional savings or checking account. Outlet would also make sense to use due to you not losing your principal and earning a much higher interest rate. The quicker you need your money the less you can expose yourself to principal risk.
When you set aside your money for an investment you are likely thinking long term. The longer you set your money aside for an investment the more likely you are to make money. When you keep this in mind you are able to introduce more principal risk into the money you set aside.
As the saying goes cash is king, and people don't want to watch their money dwindle away due to the risk of the market. There are several apps to set aside money for investing. The apps listed above are all excellent choices for those who are looking to set aide their money for an investment. However, some of the best apps to set aside money for a special purpose are an investment vehicle of some type. The right amount of safety and yield create the better app to save money with.
A big life event such as travelling comes with a heavy bill. There are mobile apps that allow you to set aside for a special purpose such as travelling listed above. One of the most important aspects for setting aside money for such a special event is the timeline in doing so. The timeline and approach you have toward your savings goal can get you there in different ways.
For example if you are saving for a vacation you can put the entire thing into Outlet and watch it grow or you can save gradually in your savings account or other savings app. It’s all up to you and how you want to go about and earn your yield.