NOVA Homes Blog: Where to Save for a Down Payment on a Home in Northern Virginia

Tuesday, June 30, 2015

Where to Save for a Down Payment on a Home in Northern Virginia

For homebuyers in NoVa this summer, saving for the down payment is one of the biggest hurdles in front of the finish line. In a past blog post, I shared how to start saving for the down payment, but you might be wondering where to keep the money.

Below are four options for risk-free accounts in which you can keep your down payment. You may sacrifice return, but you can be assured the money will be there when you need it to purchase your NoVa home!

Online savings account
Compare online rates to determine which online savings account is best, but this may be the easiest option for moving around funds. You can track the money easily via online banking and set up transfers in a snap. You also don't need to worry about the bank not being open when you need to pull your down payment.

CD or Certificate of Deposit
Most CD's have penalties if you withdraw money before the term is up, but most are indeed FDIC-insured. If you're concerned about withdrawing before the term ends, you can invest your down payment in a shorter CD (perhaps 3 months). Just know that the interest rates are better the longer the term!

Money market account
These accounts can be set up at your local bank in Northern Virginia, but do not confuse with money market funds which are similar to mutual funds. Money market accounts are typically FDIC-insured while money market funds are not. Also keep in mind that the highest-yielding money market accounts do often start with a rate that drops over time.

Checking account
Certain checking accounts are high-yielding and can offer interest rates over two and three percent. However, these accounts often have requirements like a certain number of transactions in a month, using direct deposit and even put a cap on the balance you can have in the account at a given time. If you are planning to save over $20,000, this might not be the best option.

Buying a home in Northern Virginia is one of the best investments you can make, especially long-term. Give me a call today to discuss the necessary steps toward becoming a homeowner and tour available properties in Fairfax, Arlington, Alexandria, Falls Church, Springfield and beyond.

I happily serve the areas of Alexandria, Annandale, Arlington, Burke, Centreville, Chantilly, Clifton, Fairfax City, Falls Church, Great Falls, Herndon, Lake Ridge, McLean, Mount Vernon, Reston, Rosslyn, Springfield, Tyson’s Corner and Vienna.

Earle Whitmore

Long & Foster Real Estate, Inc.
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