Savings accounts are a joke...

[fuzzybean]

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@AZHeather wrote:

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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I totally agree!  They claim it's to protect you  Or to prove you're not a drug dealer.  A 2nd checking....interesting!

[AZHeather]

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@fuzzybean wrote:

I totally agree!  They claim it's to protect you  Or to prove you're not a drug dealer.  A 2nd checking....interesting!

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The 2nd checking actually works great because whenever I make a purchase on a cc, I move that amount from my main checking accout to the 2nd acct.  Then I make my cc payments in full every month directly from the 2nd account.  It also serves as my savings.  My bank requires a direct deposit and enrollment for e-statements for a free account, so I split my pay into 2 direct deposits and signed both accts up for e-statements.  Both accounts are free and I can easily move money from one account to another (as needed) online.

[fuzzybean]

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@AZHeather wrote:

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@fuzzybean wrote:

I totally agree!  They claim it's to protect you  Or to prove you're not a drug dealer.  A 2nd checking....interesting!

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The 2nd checking actually works great because whenever I make a purchase on a cc, I move that amount from my main checking accout to the 2nd acct.  Then I make my cc payments in full every month directly from the 2nd account.  It also serves as my savings.  My bank requires a direct deposit and enrollment for e-statements for a free account, so I split my pay into 2 direct deposits and signed both accts up for e-statements.  Both accounts are free and I can easily move money from one account to another (as needed) online.

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We actually already have two checking accounts (and a savings), but I never considered using a checking as a savings and using a CC for making some extra money (cash rewards).  We currently use one checking for our swipe purchases like gas & groceries.  If we need to do bigger shopping we deposit money into the account via check and then shop.  Our other checking account is strictly for bills and what's leftover goes into savings on the last day of the month.  That debit card never gets used at stores.  Direct deposit is split between these three accounts.  Plus, only having a certain amount in the one checking for purchases helps keeps our spending down.  Only so much goes in each month...

[AZHeather]

That is exactly what I do.  Use my cc's for everyday purchases to ge tthe rewards.  It is really just like using my debt card because at the end of every day I move the money I charged from the main cking to the "savings" cking.  And yes, I agree....having a set amount of money in my main acct helps to keep me on budget and save more/spend less.

[jsucool76]

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@Roarmeister wrote:

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% 

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No...

Because when you spend that money you get a return of .05.....when it is in a savings acount with an interest rate of .05%...you're actually ending up with a return of 1.05...since none of that money is being spent...

[vanillabean]

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@ImprovingYouth wrote:

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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Yes, just pretend this year is Tuesday, next year is Wednesday and so on. By the time we get to Friday things start looking brighter with a sunny weekend ahead.

So now is the time to be lean and trim those financial calories. When you start your savings, it's what you deposit that matters. It's only later that the interest will stack up against you deposit, and maybe by the weekend too the savings rates will go up.

You stay lean until you can buy a small place. You have been diligent and paid your stuff when due, and so your credit score is high and your mortgage rate will be low, especially as long as the present levels last, which is money down your pocket, aside from the mortgage deductions.

Then put money in your 401K or IRA, which on average generates a high yield. You can't withdraw your retirement money ahead of time without penalty, but when the time comes, you'll be very happy you planned ahead.

The best way to saving is to have income put aside at deposit time. Have the bank transfer a certain percentage to your savings account, so you don't have to do it. Forget about the savings and forget about the savings rates. Get used to living within your checking account. There's a lot to look forward in years to come!