This article is strictly about savings accounts. I am talking about money after you have contributed to your Roth IRA, 401k, and any other market activities you may be involved in.
Every month I get an email alert for my bank statements online. I do not even bother looking at them because they hardly pay me any interest on my money. I was thinking we the savers put our money into a savings account to earn currently 1% on our money. I know with the economy the way it is that seems to be the average. The banks take our money for practically free and loan it out for outrageous amounts even in the double-digit percentages.
Why wouldn’t a bank try to make a killing right now in deposits offering 3-5% on savings accounts? This will in turn give them more money to make better strategic loans. Sure their profit might be a little less but at the end of the day. But they may become a stronger bank for not having so many bad loans floating.
If anyone knows of some great CD’s or Savings rates please post a comment so everyone who is trying to save a little can make a little more than 1%.
Moneywinks has decided to start something new on Friday’s. Each Friday we will ask a financial question that you can answer. Don’t worry we are not tracking your identity and it is for the sake of all of our readers. Hope you enjoy.
We can never predict the future and right now in the United States is a better time than ever to save for emergencies. I have no clue what is going to happen with my job or your job, our health, and other hardships that may happen in our life. By us not knowing what to expect we must plan for the future wouldn’t you agree?
Some people say you should start by saving up just $500. Some say you should save up to 3 months worth of living expenses. I am going to go out on a limb and say that 6 months will be a nice emergency fund to have in case you ever need some quick cash to get through a hard time in life. Budget for this and treat it like a bill until you have this fund built up. I would even suggest putting this money in a high earning interest saving account separate from your other money so that you know you have it when you might need it.
How much do you think is the right amount to have set aside for emergency living?
So often I come across people all the time who say they are trying to save. I tend to ask people when we are talking where are you banking? Whether they are banking at Wells Fargo, Chase, Bank of America, and many of the others I never hear people say they bank at online banks. It wasn’t until about 10 months ago that I was very frustrated by the fact that my local credit union and bank could not give me more than 1.25% on my savings account. To me that is garbage! I did some research and came across ING Direct. The rates at the time were 4.5% annually and there were no fees or minimums and no commitments. I signed up and over time have earned way more on my money and it is “free money” that we could all use a little more of. To this day people are still scared to use internet banks but if you do your research you can see that they are FDIC insured just like the traditional ones that people still go to. So if you are going to save money for the love do yourself a favor and get the most out of your money and earn more interest.