With uncertainty in the future rising, it’s crucial to work on creating financial security. There are many factors that go into building financial security, but the first place to start is making sure you’re saving money in the best deposit accounts. As one of the best credit unions for savings in the D.C. area and beyond, Democracy FCU is here to help you find out which deposit accounts are best for your situation. 

Deposit accounts are any account at a bank or credit union where you store money and potentially earn interest. This includes savings, checking and retirement accounts. 

There are two ways to think about saving money and creating financial security. 

  • The first is focusing on your financial goals. Make sure you have set up checking and savings accounts that help you grow funds to save for short- and long-term needs. In uncertain economic times, this is even more important to work on while employed to build security. If you’re recently unemployed, it could help you gain stability by having a financial plan.
  • The second is achieving goals after you’ve retired. It’s never too early to start planning for retirement. Focusing on creating a secure financial future can help reduce financial stress in the present.

Saving for the Short and Long Term

When you’re thinking about making the most of your money, it’s best to look for checking and savings accounts with no fees and, if possible, rewards or cash back. A free checking account and savings account give you security knowing you won’t be stuck with hidden fees. It provides relief in times of economic uncertainty, giving back more for each dollar you have. 

Saving for Retirement

One of the most advantageous ways you can create financial security for the future is with retirement savings accounts. You may have heard about a 401(k) or Thrift Savings Plan (TSP) that your employer offers. There are also Individual Retirement Accounts (IRAs), which are retirement accounts that you can open and make contributions to on your own with eligible compensation. 

Many people often think that their 401(k) or government benefits will cover them during retirement. However, that is rarely the case. The sooner you start saving for retirement by taking advantage of both your employer’s plan and an IRA, the better chance you have of a stress-free retirement.

IRAs are high-interest deposit accounts designed to keep your money locked away until retirement, often having penalties if you withdraw early. IRAs also have annual contribution limits that change each year, so the Traditional and Roth IRA contribution limits in 2025 could be different from other years. This is a great motivator to contribute as much as you can each year and a reminder to make sure you’re checking what the limit is. 

Here are the three main types of IRAs that you can choose from:

Traditional IRA: This account type uses the tax-deferred method. Your money isn’t taxed until you take it out, which should be after you’ve retired. This means the tax rate should be much lower than when you initially put money in.

Roth IRA: This account lets you grow your savings tax-free by only depositing money after you’ve paid taxes on it. This way, you won’t have to worry about paying taxes on the money when you withdraw it in retirement.

Rollover IRA: This account is basically a Traditional IRA, but the funds are rolled over from another retirement account. Most commonly, people do a 401(k) rollover to IRA after they leave a job. This allows them to continue to put money into the account and control how they want their money invested. A rollover is a transaction in which assets from one retirement account are withdrawn by the owner and deposited into an IRA or another retirement account of the same type within 60 days.

Whether you choose a Rollover, Roth or Traditional IRA, you can find security in knowing that you’re saving for retirement and preparing for the future. You can find more out about our IRA savings account rates to see how much you could earn over time.

If you have more questions about how to save in uncertain times, please reach out to us. Starting a savings plan is difficult, but we believe it is possible to find financial security. Starting with the right accounts and the goal of $25 a month is a great first step!

All of us at Democracy FCU want to help you find confidence and succeed in your financial goals. We’re here to help you open an account to secure your financial future!

DFCU staff cannot answer tax-related questions. For tax questions, please speak with your tax advisor or visit the IRS website at www.IRS.gov.