Where Should You Save Your Wedding Money?

In 2022, the average cost of a wedding came in at around $30,000, according to research from The Knot. Chances are good you aren't going to be able to pay that much out of your bank account. That means, unless you want to go into credit card debt or otherwise borrow to pay for your big day, you may need to take some time to save up money for the wedding.

If you're working on saving for a big wedding celebration, you'll want to be smart about where you keep the cash you're setting aside. There are two great options for you, with the right one dependent on your timeline and other financial factors.

A high-yield savings account

A high-yield savings account is a great place to keep your wedding money. These accounts are really easy to open, with many online-only banks offering very competitive rates on money saved. And as long as you make sure your savings account is FDIC-insured, you cannot lose money in it.

The money you put into a high-yield savings account can be withdrawn whenever you want, so if you have to make deposits with specific wedding vendors or need to take out a big withdrawal to pay a vendor or cover other costs before the big day, you have the flexibility to do it.

Just be sure to shop around among different savings account providers to find one offering a great rate and no fees. And pay attention to whether you get the bank's highest APR on all or part of your balance and whether you have to meet any special requirements to qualify for it.

A certificate of deposit

A certificate of deposit (CD) is another great place where you could potentially put your wedding money. CD rates tend to be a little higher than the rates on high-yield savings accounts, so you could potentially earn a little more interest with this option. That could help your wedding account balance grow faster. These accounts are also FDIC-insured, so you don't need to worry about losing any of your invested funds.

The downside, though, is that when you open a CD, you must commit to keeping your money invested for a period. Typically, this will be at least three to six months, and sometimes much longer. There may also be a minimum deposit requirement you have to meet in order to invest in a CD.

If you have enough money and you have a long enough timeline before your big day, then a CD could be a good place to park at least part of your wedding money. Just be aware of the fact that you could face fees if the cash needs to come out earlier than planned for some reason.

Ultimately, both of these options provide a safe place for wedding funds, but the right one is going to depend on whether you want to prioritize flexibility or higher interest rates. That choice is up to you and depends on your needs when it comes to your nuptials.