Having a nest egg is a great way to retire with a secure financial backing. In order to do this, you’ll need a savings plan.

Savings Account

One of the simplest plans is to open up a savings account. This allows you to put away cash and get a return dependent on the interest rate. Your money could make money for you! You can even set up automatic transfers from your checking account so that a certain amount is taken out monthly or each payday.

Certificate of Deposit

Certificate of Deposit (or CD) is a deposit account that gives you a fixed rate of return after a specific time period (90 days, 6 months, 12 months, etc). They are FDIC-insured, so your money’s safe within the account. Many CDs also go through automatic renewal, so you can reinvest the money right back into another CD. You can purchase CDs from local banks, brokerage firms, or independent salespeople.

Savings Bonds

Fairly similar to a CD, savings bonds are investments you make into the US government. They garner interest as they mature and this interest is exempt from state and local income taxes. They can be purchased from banks, employers through payroll deductions, or over the internet. There are two types that can be purchased: Series EE Bonds and I Bonds.

Series EE bonds are issued either on paper or electronically. Paper bonds are purchased for half value (a $100 bond is purchased for $50), while electronic bonds are purchased for whole value (a $100 bond is purchased for $100). A minimum purchase of $25 is required, while the maximum one can purchase is $30,000. These bonds earn market-based rates that change twice a year.

I Bonds are also issued either on paper or electronically. They are purchased solely at the face value denomination ($100 for a $100 bond). A minimum purchase of $25 is required, while the maximum one can purchase is $30,000. Unlike Series EE bonds, these types of bonds earn interest monthly on a fixed rate plus a semiannual rate of inflation and can earn for up to 30 years.