With the spring semester underway, Southern University students are encouraged to save money for the future.
According to Liz Pulliam Weston, a personal financial columnist at MSNMoney.com, the average college student graduates with more than $20,000 in debt. “I am in credit card debt. However, I plan to pay off most of my debt by the end of the year,” said Lemoine Howard, a business marketing major from Zachary.
Instead of spending their entire refund check, students can go to the local bank or credit union to open a savings account.
Neighbors Federal Credit Union, the fourth largest credit union in Louisiana, allows individuals to open savings accounts with a minimum balance of $5.
Officials at the bank said the APY is the interest rate earned in one year, considering the effect of compounding. If customers maintain a balance of $100 or more, savers can earn an annual percentage yield of 1.51 percent.
Dewey Richardson, vice president of marketing at Neighbors Federal Credit Union, said, “A minimum of $4 a day, that students use to purchase a hamburger, over a year period can earn them $1,500.”
If continued throughout four years, students can earn approximately $6,000, he said.
For students who like to manage their money online, EmigrantDirect.com, an online bank, offers a savings account with no minimum balance for an APY of 5.05 percent.
With time to spare and more cash, financial experts say students can earn a fixed interest rate on their money by opening a certificate of deposit (CD).
Chase is offering customers the opportunity to earn an APY of 4.00 percent with a minimum deposit of $1,000, if they agree to a six-month term.
At EmigrantDirect.com, students can earn 5.20 percent APY on a CD for six months with a minimum deposit of $1,000.
Mike Schiano, the vice president of outreach for InCharge Education Foundation, a national non-profit organization specializing in personal finance education, said the need to save money for the future is vital.
“Saving is critical to get (students) ready for their future,” Richardson said.
Schiano said people should save for five main reasons: unexpected emergencies, retirement, healthcare, volatility of social security and education.
Southern students agree having a savings account is important in their lives.
“I think it is very important because you don’t ever know what type of emergency will come up,” said Monica Parker, a business management major from Baton Rouge.
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