Wedding Saving Accounts: What Are They and How Do They Work?
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Summary:
It’s smart to open a savings account in order to save money for a wedding. You have a few options for wedding savings accounts, including a traditional savings account, high-yield savings account, money market account, or a CD. You can contribute on your own or allow other people to make deposits as well.
We all know weddings can cost a small fortune, so the sooner you start saving for one, the better. You can even open a wedding savings account that is specifically for wedding-related expenses, from a dress and tux to invites, cake, and a venue.
If you’re going to sock away some money over a few months or a year, you might want to choose an account with a high interest rate or other benefits so that you get the most out of your investment. If your wedding is right around the corner, however, you may want to explore some alternatives. We’ll explain some of your options below.
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What is a wedding savings account?
A wedding savings account is any account that you open to save money for your wedding expenses. This can be an account at a brick-and-mortar institution or an online savings account.
If you go to your bank or credit union and ask about this type of account, they may have something specifically labeled a wedding savings account. That being said, they may also have other accounts that would work well for this purpose.
Types of wedding savings accounts
With weddings now costing tens of thousands of dollars, it makes sense to designate an account to save for one. If you have a long time to plan your wedding, you may prefer an account where the money can sit for a while earning interest.
If you have less time, or you think you’ll need to make regular withdrawals from the account, you might want to go with something more liquid. Here are some of your options:
Traditional savings account
A traditional savings account typically has a low interest rate (less than 1%) but you can make deposits or withdrawals any time you want. Some institutions also allow you to open a joint account with your partner or allow other people to make deposits as well. This could be a good idea if you anticipate getting gifts or reimbursements from relatives.
Pro Tip
If you prefer to have access to your funds at all hours of the day, you may want to look into online savings accounts specifically. Without physical branches to worry about, you know your funds are safe and accessible entirely online.
High-yield savings account
Many banks, especially online banks, offer high-yield savings accounts with higher interest rates (often more than 1%). However, these accounts may have limits on how many withdrawals you can make each month before you incur a penalty fee.
That said, they’re usually relatively easy to set up and sometimes you can link them to your regular bank accounts.
Money market account
Banks and credit unions also offer money market accounts that work well for long-term savings goals. The interest rates are also higher than those of traditional savings accounts. But in exchange for the extra interest, there may be more requirements, such as minimum deposits, withdrawal limits, and account fees.
CD account
Another option is to open a CD, or certificate of deposit, account. CDs can have even higher interest rates than the other types of savings accounts, but you have to leave your money in the account until it matures. If you withdraw the money early, you may have to pay a penalty.
There are different types of CDs with different term lengths. Depending on the amount of time you have to save, you can choose the term that is right for you.
Pro Tip
Fortunately, most of these types of savings accounts will be insured by the Federal Deposit Insurance Corporation (FDIC-insured) up to $250,000. So you can rest easy knowing that your money is protected while you wait for your big day.
How much should you save for a wedding?
Every wedding, and every wedding budget, is different. Some backyard weddings can cost as little as $10,000, while other extravagant celebrations cost $100,000 or more. When making your wedding savings plan, you’ll want to take your largest expenses into consideration.
Types of expenses
Your biggest expenses when saving for a wedding will probably be:
- Venue rental
- Food and booze
- Wedding dress and suit or tuxedo
- Rings
- Photography and videography
- Invitations
- Cake
- Music (band or DJ)
- Honeymoon
- Flowers
Of course, that’s not to say every wedding needs all of the above. Some couples prefer celebrating in their everyday work clothes while others want to go all-out for the occasion. As with most financial decisions, consider your personal situation when determining a wedding savings goal.
Ways to save money
Sure, you can deposit money willy-nilly or as it comes in. But if your savings goal is something like $30,000, you might need to be more disciplined. Here are some ways to regularly contribute money to your wedding savings account.
- Direct deposit. If you need a set-it-and-forget-it type of deposit, you could set up a direct deposit once or twice a month. Sometimes financial institutions will also reward you for direct deposits by eliminating or lowering fees.
- Multiple contributors. You can also rack up the savings by getting wedding savings accounts that allow for multiple contributors. Perhaps your parents or other relatives want to make deposits, and if your financial institution allows it, you can set that up.
- Automatic transfers. You could set up some automatic transfers from your checking account into the savings account, perhaps weekly or monthly. And if you have a joint savings account with your partner, perhaps both of you could contribute.
If you prefer the idea of transferring funds at preset times, take a look at some of the savings accounts below, each of which offers automatic transfers.
Pro Tip
When it comes to weddings and these big life events, people often want to help but don’t exactly know how to. Make it easy for them to contribute by setting up a wedding savings account and giving them directions on the best way to pitch in.
FAQs
What kind of account should I open for a wedding fund?
If you have a short amount of time before the wedding, you might want to go with a traditional savings account that you can withdraw from frequently. If you have more time, go with a money market or CD account with a higher interest rate.
Should I make a separate bank account for a wedding?
It’s not a bad idea to separate your wedding savings from your regular checking account and savings accounts. That way you can keep track of how your wedding saving is going, and perhaps earn extra interest while you wait for the wedding day.
How much should you save monthly for a wedding?
That really depends on the type of wedding you want to have and your overall budget. Once you make your wedding budget, divide it by the number of months until the wedding. This will give you an idea of how much money you have to set aside each month to have your dream wedding. If that number is too big, you may have to cut some costs until you reach a reasonable plan.
How can I save money for my wedding fast?
Ask for help! It could be hard to save money on your own. So ask your partner to open a joint wedding savings account or choose an account that allows other people to make deposits.
Key Takeaways
- A wedding savings account is designed to help you save money for any wedding costs.
- You can get a special savings account from a bank, credit union, or online bank to help you with your wedding savings.
- If you need to save money fast, you might want to get a joint account or an account that allows multiple people to make deposits.
- You can save for your wedding with a traditional savings account that has more flexibility or a high-yield savings account, money market account, or CD account with a higher interest rate.
- To stay disciplined when saving for your big day, consider setting up automatic transfers or direct deposits.
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Cara Corey is a writer and editor who loves to help people make sense of confusing topics. Her work has been featured in many blogs, newspapers, and magazines, including the Des Moines Register, Boulder Daily Camera, Better Homes and Gardens, and Parents Magazine.
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