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Frequent Contributor
fuzzybean
Posts: 305
Registered: ‎04-04-2012

Savings accounts are a joke...

My oldest daughter (17) is very in tune with her money and we go over her accounts once every pay day (every other Friday)...at her request.  She has nearly $1400 in savings and last month got a whopping .05 in interest.  This month she only got .01 which happens to be the going rate for interest for savings at this particular bank. Are we going to have to pay banks to keep our money in the future?  She also has 2 CDs with nearly 7k & 3.5k in them that she's freaking out about.  Funny how she's so concerned with her money but thinks she can spend ours without guilt.

 

What's the point of having the money in the bank?  Why not stuff it in a mattress?  It's probably safer there?

 

Do you think the interest rates will go back up?  They are really awful right now!

Regular Contributor
ImprovingYouth
Posts: 154
Registered: ‎09-21-2012

Re: Savings accounts are a joke...

Savings rates are being held at close to nothing due to the monetary policies that the Feds are trying to promote. In order to increase spending and the economy as a whole the Feds are trying to get you and all Americans to use there money and NOT save. There should be an upside to this, as all lending rates should be at historic lows and money should be easily obtainable because banks essentially have an unlimited supply of close to free money. However due to the credit crunch in recent years, banks have clamped down on lending and made it inaccessable to many Americans.

 

Basically, the rates are all great for borrowing money but will be horrible for lenders (in this case that include you as you are lending the bank your money for close to nothing)  for a long long time. Basically until the entire US economy improves drastically.

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Valued Contributor
Imhotrodcrazy
Posts: 1,403
Registered: ‎03-11-2009

Re: Savings accounts are a joke...


fuzzybean wrote:

What's the point of having the money in the bank?  Why not stuff it in a mattress?  It's probably safer there?

 


I keep my money under my mattress, right next to my 357. 

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Senior Contributor
jsucool76
Posts: 3,233
Registered: ‎12-11-2011

Re: Savings accounts are a joke...

I'm earning 0.94% on my money market right now (which is entirely free by the way) and with what I have in there right now (which isn't a whole lot) i'm earning around $50 bucks a year in interest. 

 

I do my money market with ally, but I do all my checking accounts through banks with branches (I have chase and wells fargo mainly). 

Frequent Contributor
fuzzybean
Posts: 305
Registered: ‎04-04-2012

Re: Savings accounts are a joke...


Imhotrodcrazy wrote:

fuzzybean wrote:

What's the point of having the money in the bank?  Why not stuff it in a mattress?  It's probably safer there?

 


I keep my money under my mattress, right next to my 357. 


Love it!

 

Valued Contributor
trumpet-205
Posts: 2,440
Registered: ‎11-11-2010

Re: Savings accounts are a joke...

[ Edited ]

You put money at online banking. That will get you around 0.8% interest rate, which is much better than 0.05% you seen across major banks.

 

As for why do one need savings account, it is because savings account is liquidable. Sure you can invest those money into stocks, social lending, etc that offers much higher return, but you won't be able to cash them out immediately if find yourselves in an emergency.

 

As a note, interest rate will stay the same until late 2014. Federal Reserve won't increase interest rate until then.

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Frequent Contributor
fuzzybean
Posts: 305
Registered: ‎04-04-2012

Re: Savings accounts are a joke...


trumpet-205 wrote:

You put money at online banking. That will get you around 0.8% interest rate, which is much better than 0.05% you seen across major banks.

 

As for why do one need savings account, it is because savings account is liquidable. Sure you can invest those money into stocks, social lending, etc that offers much higher return, but you won't be able to cash them out immediately if find yourselves in an emergency.

 

As a note, interest rate will stay the same until late 2014. Federal Reserve won't increase interest rate until then.


I know all the reasons and I'm fine should an emergency arise, I was just venting.

 

Frequent Contributor
Roarmeister
Posts: 328
Registered: ‎04-21-2012

Re: Savings accounts are a joke...

I earn between 1-5% cash back on two of my cards and points on a couple of others.  Isn't that BETTER than a savings account at 0.5%  :smileyhappy:

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Frequent Contributor
fuzzybean
Posts: 305
Registered: ‎04-04-2012

Re: Savings accounts are a joke...

Difinitely!

Frequent Contributor
AZHeather
Posts: 304
Registered: ‎04-26-2012

Re: Savings accounts are a joke...

You also have to love the federal rule that went into effect this year wherein you cannot have more than 6 withdrawals per month of YOUR savings or you will be charged a fee from your bank.  WTH is with that?  It is my money and I should be able to move it to and from my savings as I want without the Feds telling my bank they have to charge me a fee.  Not that I move money out of my savings more than 6 times a month, but it is the principle of it.  

 

I actually closed my savings and opened a second checking account (no monthly charges), and while I may not earn my few pennies a month, at least I can withdraw money as I want without penalty.


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