Want to Vacation More? Here’s Where I Keep My Travel Fund

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.

You have options for where to keep your vacation fund. Read on to learn about one of the best places to keep your money safe and help it grow. 

After a few pandemic-ridden years, travel is back in a big way. I made my first-ever trip outside of North America earlier this year, and I’m not alone in putting a higher priority on travel in the wake of COVID-19. A recent Forbes Advisor survey of 1,000 Americans found that a whopping 87% intend to travel at least as much as they did in 2022, and 49% intend to travel more than last year, despite the high inflation we’ve all been living with.

It’s not enough to have the intention to travel — you also need the follow through. And that’s where having a plan to save money for vacations comes in. But you need a safe place to keep that money, and ideally, it would be somewhere your money can grow, too. I keep my travel fund in an extremely approachable bank account: a high-yield savings account.

Wait, a plain old savings account? Really?

Yes, really! I still think a certificate of deposit (CD) can be an excellent place to keep the cash for a far-off travel goal (dream honeymoon, perhaps?). But a savings account is probably your best bet if you’re putting cash aside to fund near-term travel.

Why? Well, for starters, a savings account keeps your money accessible. You can link one to your checking account or choose one at a different bank if you see a great APY elsewhere. It’ll generally take one or two business days at most to send money from one account to the other if they’re at different banks, or it might be instant if your banks both work with the same mobile payment application.

And to give another point for savings accounts, online-only banks are currently offering APYs of 4.00% or better these days. Mine actually just emailed me; on the heels of the most recent Federal Reserve rate hike, I’ll be earning 4.25% on my savings account. You won’t get that kind of return on any other account that is more accessible and easier to use. Plus, the best savings accounts out there come without maintenance fees, and many also have a low or no required minimum deposit to earn interest. And they’re even FDIC insured.

Try these tips to enhance your travel fund

If you’re ready to start funding a savings account and dreaming of vacations, here are a few ways to make it happen:

Pay yourself first: This means deciding how much you want to save every week or month (or whatever schedule works for you), and then taking that money out as soon as you get paid. Don’t leave the savings for after your bills are paid and you’ve spent your discretionary cash — you might not have anything left to save.Automate it: I haven’t automated my savings, but that’s not because I don’t see the value in it — it just doesn’t work for me personally. But if you struggle to save, taking this step might help.Start actively planning your trip: Dig in and see how much plane tickets, ground transportation, restaurant meals, and hotel rooms (as well as everything else you’ll need to pay for) will actually cost you! The most proactive way to save is to start from a place of knowledge. Plus you can start dreaming about that ocean view…Make your money go further with the right credit card: Yes, you are saving money for this trip. But I recommend paying for your expenses with a great travel credit card and then using the cash you saved to pay off that card. You’ll earn points toward future travel and be granted purchase protections, and potentially travel insurance, along the way. And if you have a luxury travel credit card, airport lounge access and hotel room credits could also be yours.

We live on a beautiful planet, and traveling allows you to see it for yourself. I hope I’ve inspired you to open a new savings account and start saving for your next trip.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you 11x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2023.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

 Read More