Tiny Interest Rates on Savings Accounts Make CDs a Better Choice for Savers, AAA Tells Consumers

Orlando, Fla. – 4/1/2010

AAA Financial Service’s “How to Invest in CDs and Money Market Accounts” video series on MonkeySee.com/AAA urges consumers to shop non-traditional and online providers  

Cynthia BroughAAA – the largest paid-membership organization in North America – is offering consumers advice on using CDs and Money Market Accounts when saving for emergency expenses, or “big ticket” items like cars and dream vacations, via a series of “how-to” videos available free on the Internet. The series is part of a group of videos from AAA on the topic of constructing a sound savings strategy. The videos can be viewed on MonkeySee.com/AAA and Youtube.com/AAA.

Hosted by Bill Gerhard, director of AAA Financial Services, AAA created the videos to help address America’s renewed interest in building a savings portfolio in an era of tight and more expensive credit. “It is important for consumers to know they can get better returns on their money by avoiding savings accounts that pay almost no interest, yet still have the safety and security of FDIC-insured deposits in Money Market Accounts and CDs,” Gerhard said.

AAA’s videos on investing in CDs and Money Market Accounts can help consumers understand ways each can help them create a balanced portfolio of savings to meet different needs, including having an emergency cash cushion or avoiding borrowing money at high interest rates to make foreseeable future purchases; such as a car or truck.

The series also stresses the importance of understanding how to “ladder” CDs to achieve a better average return, the power of compound interest and using the “Rule of 72” when calculating how long it will take to double your money on savings. The videos cover:

  • What is a CD?
  • Comparing Savings Rates: APR and APY
  • CD Early Withdrawal, Penalties and Maturity Options
  • CD Laddering
  • Savings – Compound Interest and the Rule of 72
  • Where to open a savings account

AAA’s videos are intended as introductions to the topic of CDs and Money Market Accounts and are not meant to provide specific financial advice to individual consumers. AAA is an example of a non-traditional provider of financial services whose first obligation is to serve members – not shareholders – and to secure the safest and most favorable financial terms possible. AAA offers members a variety of savings products – including CDs and Money Market Accounts – with better-than-average rates at www.AAA.com/deposits .

As North America’s largest motoring and leisure travel organization, AAA provides more than 51 million members with travel, insurance, financial and automotive-related services. Since its founding in 1902, the not-for-profit, fully tax-paying AAA has been a leader and advocate for the safety and security of all travelers. AAA clubs can be visited on the Internet at AAA.com.

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