I am currently saving about $1,000.00 per month. Right now it is just sitting in my checking account. I am hoping to purchase a town-house early next year with what I am saving. What type of account should I be saving into?

If you are going to be spending it in 6 to 8 months, even a interst paying checking would be better than no interest, but since you can't tie it up for longer than 6 months ( early next year) I guess nothing more than a 6 month CD for what you have now, and a interest bearing savings for what you save each month till time to spend it.

Thank you Fr Chuck. You always seem to reply to my posts and I greatly appreciate the responses! If I were to stretch making a purchase for a year, would a CD still be the best way to go? Also, my company has just started offering 401K. They are not able to match right now. Is this something I should even consider without them matching?

I opened an account with ING online.

Savings... no fees or hidden costs... I liked that part. Local bank can't even do that

ING DIRECT - Save Your Money! (http://www.ingdirect.com)

If you PM me an email, I can send a link for you to get $25 free when you put $250 in a new account with them.