Save allows you to allocate your deposits to your desired term length. Save’s term lengths are 1 and 5 years. First, customers must balance their liquidity needs vs. the potential APY* for their desired term.
As an example, if you predict you'll need your deposit in a year for buying a new house or paying for college, we advise you to allocate your deposit to a 1-year term. Alternatively, if the savings are meant to pay for college in 5 years or more, picking a 5-year term is more adequate.
Most customers have mixed liquidity needs or unknown needs. In these cases, a laddering strategy may be more appropriate. Laddering is a savings strategy to spread a lump sum of cash across multiple terms to take advantage of higher rates while freeing up portions of that money at short-term intervals.
A simple approach would be to allocate long-term needs to a 5-year term while splitting the rest between 1-year terms depending on the rates offered. For example, if a customer needs $50,000 for college after 5 years and the rest for an unknown length of time, we advise allocating $200,000 to a 1-year term and $50,000 to a 5-year term.
*Generally, an APY (or annual percentage yield) is the yearly return on a bank or investment account. Save Market Savings is a hybrid product and service that includes deposit account linked to an investment product. The deposit account portion of the Save Market Savings product and service is provided by Webster Bank, N.A., Member FDIC; and is non-interest bearing with a 0% APY. The investment portion of the Save Market Savings product and service offers the potential to earn an APY with a variable rate (Variable APY). The Variable APY, if any, is derived from the investments made by Save on behalf of the customer within Save’s portfolio of strategies over the duration of term length selected by the customer. The Variable APY, if any, will be equal to the cumulative return for the investments selected for you by Save for the term selected on the applicable maturity date. The Variable APY may be 0% but will never be less than the Minimum Variable APY of 0% per annum. Assuming a minimum Variable APY of 0% per annum, if the Variable APY applicable to a particular maturity date is less than or equal to the Minimum 0%, the customer will not receive any Variable APY return for that investment upon maturity. Variable APY’s are subject to change at any time. Variable APY is not guaranteed. The Variable APY presented is hypothetical in nature and reflects the potential growth that could accrue if the investment is held for the entire term selected. Variable APY’s are based on hypothetical back-tested performance in the Save Moderate Portfolio from 2006 to present and are shown net of fees. Hypothetical back-tested performance is no guarantee of future performance and actual results will vary. For more detailed information please seeHypothetical Back-testing.