Has anyone gotten a ssl to start a savings acct?

[AllZero]

---

@GApeachy wrote:

---

@AllZero 

---

Thank you for driving it home

---

You're welcome.

[GApeachy]

Okay, thanks ....not gonna deny it knocked the wind out of my sails but at least I know where to start.

[AllZero]

---

@GApeachy wrote:

Okay, thanks ....not gonna deny it knocked the wind out of my sails but at least I know where to start.

---

$5 a month or week into savings will add up in 15 years. Every little bit helps.

[GApeachy]

---

@AllZero wrote:

---

@GApeachy wrote:

Okay, thanks ....not gonna deny it knocked the wind out of my sails but at least I know where to start.

---

$5 a month or week into savings will add up in 15 years. Every little bit helps.

---

Yes, it does.  Thanks!  I didn't understand ssl.

[GApeachy]

I'm sorry, I have one more question: What is Self Lender?  Are they similar?  Could I build savings and credit with little to no money upfront?

[GApeachy]

---

@AllZero wrote:

---

---

Share secured loans are essentially a way for you to borrow, using your own savings as the collateral. Instead of using all your savings to make a purchase, thus losing out on all future dividends and your emergency safety net, you're borrowing against that sum while your money stays in your account.

https://www.towpathcu.com/understanding-share-secured-loans.aspx

---

SCRATCH that last ? I've read some posts on here about Self Lender (I think is where I was having mixed ideas to begin with) and  this ^^^SSL. Definitely going tomorrow to CU to get the ball rolling with SSL.

[Anonymous]

An SSL won't work if you have no savings to begin with, since you have to put the collateral up front.

In other words, you need $1000 in savings to take out a $1000 SSL.  After taking out the loan, you end up with $1000 in loan proceeds plus $1000 tied up in your account you can't touch because it's collateral.  You pay off the loan, including interest, and you end up, in the end, with the original $1000 (plus any interest/dividends you earned on the savings) you put into savings in the first place, and you're out whatever interest you paid.

So a SSL isn't a good way to build savings.  Its only "useful" purpose is to get a loan on your credit reports for FICO score boosts, if you have no other loans like a mortage, car or student loans.

Self lender is another option.  Let's use $1000 again for simplicity's sake.  You take out the self lender loan for $1000, which then gets put into a certificate... so you have no access to the money you borrowed.  This acts as the collateral of sorts.  You make the payments (and there's interest involved, though you also earn a little on the certificate).  When the loan is paid, the $1000 (plus any interest/dividends from the certificate) is released to you.  So essentially you're paying interest and fees to force yourself to save, and you get a loan on your report.

If you're just trying to build a nest egg, instead of taking a loan and making payments including interest, just put the equivalent of that "loan payment" as an automatic transfer into savings weekly/biweekly/monthly.  Then you pay no interest, and you get the benefits of compounding interest on the savings.  With most employers you can also designate a portion of your paycheck to get deposited directly into a savings account as well, so it just happens and you don't have to worry about it.

[GApeachy]

---

@Anonymous wrote:

Self lender is another option.  Let's use $1000 again for simplicity's sake.  You take out the self lender loan for $1000, which then gets put into a certificate... so you have no access to the money you borrowed.  This acts as the collateral of sorts.  You make the payments (and there's interest involved, though you also earn a little on the certificate).  When the loan is paid, the $1000 (plus any interest/dividends from the certificate) is released to you.  So essentially you're paying interest and fees to force yourself to save, and you get a loan on your report.

---

That's what I want to do. I just can't tie up $10k with no access; I don't like that, but $1k at a time is doable. We have a lot built up in our whole life policies and we do have Savings through Ins. co as well; though nothing I could or would touch.  We're self employeed so I'd never touch those funds.  It's taken tooooooo long to build those.  

But this is for my grandbaby, I do have a couple of Savings accts. with my CU but I'm not one to put the money in like I should.  So $1k at a time I can do.   Thank you to both of you for explaining and giving me ideas.  I'm excited to get this ball rolling.

[Green456]

---

@GApeachy wrote:

I want to do this for my grandbaby....and grandbabies to come.  I should have an open installment reporting.  What all would I need to do; need to know in order to make this happen?  Would a SSL be an easier way to create a nest egg, by forcing it,  other than throwing lose change at a savings acct?  

---

If you want to force your hand then use 529 for college savings. I use nysaves.org. Withdrawing anything from that account would not only make you feel terrible for taking money out of their education but also get punished with huge penalty and tax consequences.

[Anonymous]

Yeah I wouldn't use SSL or any type of loan to start a savings. The APR would negate any earnings from the interest. You'd be better off investing that start up Money on your own, instead of paying high interest rate on  it. 

Are Trust Funds simply not a thing anymore?  

I think staggering CD's would be one method, as you cannot take the Money out until maturity. Plus their rates are often higher than HYSA's.

Though I would also open one of those as a just in case scenario, so that if needed you could remove the cash for whatever.

Or as the last post commented, the 529. However, it must be used for College. So if the person chooses not to go, I beleive it's essentially useless. Plus it can come with high fees depending on the State of residency.