According to the 2012 Financial Literacy Survey, 36 percent of all Americans save nothing, and 8 percent save more than 20 percent of their income. While the term, "building a nest egg" is often associated with retirement savings, you can also include non-retirement accounts allowing for emergency access of the money, such as if you suffer a loss or reduction in income. Ideally, you should spread your nest-egg savings over many different types of investments.
High-Interest Savings Accounts
A high-interest savings account pays higher interest than other accounts, often because it has a higher minimum balance requirement. Many online banks offer these accounts, which are insured by the Federal Deposit Insurance Corporation, and ultimately by the U.S. government, against loss of principal up to $250,000 per bank. These accounts are also a good place for your emergency fund, or money that you may need at a moment's notice to cover a need that arises quickly.
Certificates of Deposit
Certificates of deposit enjoy the same FDIC protections as high-interest savings accounts, but generally at higher interest rates. In exchange for these higher rates, you agree to leave your money on deposit for a specific period of time, from 3 months to five years or longer. Generally, the longer the term of a CD, the higher the interest rate earned. If you withdraw from a CD before the term ends, you will pay a penalty for the early withdrawal.
Bond Mutual Funds
Bonds are debt instruments that public companies, state and local governments, non-profit institutions or the U.S. government issue to finance capital improvements or other operations. A bond is a promise to pay a certain amount at a specified time, which includes interest. Bond mutual funds purchase a variety of different bonds for investments. As interest rates change, bonds may be sold for a profit, increasing the return. Bonds generally offer a higher potential return than CDs with less volatility, or large price shifts, than stocks.
Stock Market Mutual Funds
Most people, particularly those younger than retirement age, invest a portion of their nest egg in the stock market. Stock market mutual funds are a great way to diversify investment in the stock market. Most experts consider the stock market the place to invest money that you will not need for the long-term, as over time market fluctuations usually trend toward a decent gain.
If you have a large nest egg as you get close to retirement, you may want to purchase an annuity with some of that money. With a one-time purchase, or periodic payments over time, you buy the right to collect a monthly income, either for a certain period of time, or for the rest of your life. Some annuities pay a fixed amount of money, and others may pay more or less depending on your investment performance.