All you need to make deposits to a certificate of deposit on a monthly basis is a CD that permits you to make deposits prior to its maturity date, funds for investing and the discipline to put money aside for your savings. It's a good idea to set up an online bank account to act as a holding account for these funds: You can deposit money throughout the month into the holding account, then make the transaction to add the funds to the CD once every 4 weeks.
Open a liquid CD account that permits monthly deposits. Check with your bank to see if they offer this product. Such institutions as Wachovia and NW Preferred Credit Union include liquid CDs in their portfolios (see Resources below). Examine the terms carefully--some liquid CDs permit withdrawals but not deposits, and others require minimum deposits in such amounts as $100 or $500.
Determine how much you want to save per month. A good rule of thumb for saving post-tax dollars is putting aside 10 percent of your paycheck each period. If you have to make a minimum deposit of $500 each time, you might need a second part-time job or to cut back on your spending to accumulate the extra money.
Set up automatic deductions from your checking or savings account to be added to the CD. This ensures that your deposit will be made every month.
Make the deposit yourself with a bank teller if your account balance fluctuates and it's too hard to predict if you will have enough to cover the automatic deduction every 4 weeks.
Deposit the money into the CD at an ATM if you can't do your banking during regular business hours. Use an ATM at your bank's branch to access your CD account.
Do your banking online. Log into your account and set up the deposit each time you are ready to add money to the CD. This gives you the convenience of making deposits anywhere that you can access a computer, but be careful not to expose your personal information.
References
- Internal Revenue Service. "Get Your Refund Faster: Tell IRS to Direct Deposit your Refund to One, Two, or Three Accounts." Accessed July 1, 2020.
- Venmo. "How Venmo Works." Accessed July 1, 2020.
- PayPal. "Who We Are." Accessed July 1, 2020.
- Walmart. "Walmart MoneyCenter." Accessed July 1, 2020.
- National Credit Union Association. "Share Insurance Fund Overview." Accessed June 19, 2020.
- Federal Deposit Insurance Corporation. "Deposit Insurance FAQs." Accessed June 19, 2020.
- Federal Deposit Insurance Corporation. "Understanding Deposit Insurance." Accessed July 1, 2020.
- Federal Deposit Insurance Corporation. "Evaluation of Federal Oversight of Washington Mutual Bank," Page 1. Accessed July 1, 2020.
- Consumer Financial Protection Bureau. "Administrative Proceeding 2016-CFPB-0015," Page 4. Accessed July 1, 2020.
- Consumer Financial Protection Bureau. "Consumer Financial Protection Bureau Fines Wells Fargo $100 Million for Widespread Illegal Practice of Secretly Opening Unauthorized Accounts." Accessed July 1, 2020.
- Wells Fargo. "Wells Fargo Launches ‘Re-Established,’ a New Brand Campaign." Accessed July 1, 2020.
- U.S. Securities & Exchange Commission. "JP Morgan Chase Paying $264 Million to Settle FCPA Charges." Accessed July 1, 2020.
- Consumer Financial Protection Bureau. "Checklist for Opening a Bank or Credit Union Account," Page 1. Accessed July 1, 2020.
- Federal Deposit Insurance Corporation. "FDIC Law, Regulations, Related Acts." Accessed July 1, 2020.
- Alabama State Legislature. "Alabama Code Title 26. Infants and Incompetents. S26-1-1." Accessed June 22, 2020.
- Federal Deposit Insurance Corporation. "Guidance to Encourage Financial Institutions' Youth Savings Program and Address Related Frequently Asked Questions," Page 1. Accessed July 1, 2020.
- U.S. Department of Veterans Affairs. "Change your VA direct deposit information." Accessed July 2, 2020.
- Social Security Administration. "Set Up or Change Your Direct Deposit of Benefit Payment." Accessed July 2, 2020.
- Comptroller of the Currency, Administrator of National Banks. "Depository Services," Page 54. Accessed June 19, 2020.
- Federal Deposit Insurance Corporation. "Expedited Funds Availability Act," Page VI-1.1, VI-1.6. Accessed June 19, 2020.
- Federal Deposit Insurance Corporation. "Expedited Funds Availability Act," Page VI-1.6. Accessed June 19, 2020.
- Federal Deposit Insurance Corporation. "Expedited Funds Availability Act," Page VI-1.3. Accessed June 19, 2020.
- Office of the Comptroller of Currency. "My employer pays me via direct deposit. When are those funds required to be available?" Accessed June 19, 2020.
- Federal Deposit Insurance Corporation. "FDIC: Weekly National Rates and Rate Caps -- Weekly Update." Accessed June 19, 2020.
- JPMorgan Chase. "Chase Savings Interest Rates." Accessed July 2, 2020.
- Federal Deposit Insurance Corporation. "Insured or Not Insured?" Accessed June 19, 2020.
- Federal Deposit Insurance Corporation. "FDIC Statistics at a Glance." Accessed June 19, 2020.
- Federal Deposit Insurance Corporation. "Weekly National Rates and Rate Caps." Accessed June 22, 2020.
- Federal Deposit Insurance Corporation. "When a Bank Fails -- Facts for Depositors, Creditors, and Borrowers." Accessed June 22, 2020.
- Federal Deposit Insurance Corporation. "What We Do." Accessed June 22, 2020.
- Federal Deposit Insurance Corporation. "Basic FDIC Insurance Coverage Permanently Increased to $250,000 Per Depositor." Accessed June 22, 2020.
Writer Bio
Christa Titus is a dedicated journalism professional with over 10 years writing experience as a freelancer with a variety of publications that include "Billboard" and "Radio & Records." Her writing has also been syndicated to such media outlets as the "Washington Post," the "Seattle-Post Intelligencer," the Associated Press and Reuters. Titus earned a Bachelor of Arts in journalism from Rowan College.