Current Events > What is the point of a savings account?

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You get 1$ of interest after 5 months.

I just threw 100$ at this investment shit and Im up $2 in four days.

Saving accounts are scams.

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they earn a teeny bit of interest while still allowing easy and quick access to your money (ie it's "cash"). once you invest money you gotta sell whatever the investment was to have cash again.

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-high-yield savings accounts are thing

-the stock market goes up and down

-if you're planning on using that money to make a major purchase do you really want to risk the market tanking when you're about to put a down payment down on a home?


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Place to park capital till you want to invest it. A small amount of interest is better than nothing

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Giant_Aspirin posted...

they earn a teeny bit of interest while still allowing easy and quick access to your money (ie it's "cash"). once you invest money you gotta sell whatever the investment was to have cash again.

I cant just withdraw some of my earnings? I have to take out the whole thing?

BignutzisBack posted...

-high-yield savings accounts are thing

-the stock market goes up and down

-if you're planning on using that money to make a major purchase do you really want to risk the market tanking when you're about to put a down payment down on a home?

This is true. It ensures your money doesnt rapidly dip when you need it most. Fair point.

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Ex-Kefiroth posted...

There used to be a point, but then in 2008 the Federal Reserve gave a big "FUCK YOU" to savers, cutting interest rates to zero, which is pretty much where they've been ever since.

Trump's America...

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FDIC insurance

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Put your savings into weekly OTM TSLA calls and you can double your investment every week.

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Ex-Kefiroth posted...

There used to be a point, but then in 2008 the Federal Reserve gave a big "FUCK YOU" to savers, cutting interest rates to zero, which is pretty much where they've been ever since.

Inflation's been pretty flat the past decade too

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AlephZero posted...

Put your savings into weekly OTM TSLA calls and you can double your investment every week.

I dont know what this is.

furb posted...

FDIC insurance

That $250k thing? Maybe savings are more useful for rich people.

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cuttin_in_farm posted...

I cant just withdraw some of my earnings? I have to take out the whole thing?

you can sell part of your investment, sure, but there is still some overhead and a delay there. if i want access to the money in my bank accounts i get it immediately. if i want access to money tied up in investments i need to initiate the sell and wait for the deposit to show up in my bank account which won't happen until the next business day or later.

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cuttin_in_farm posted...

I dont know what this is.

That $250k thing? Maybe savings are more useful for rich people.

Or if the stock market craters.

Not saying it is likely but they exist for a purpose. To protect your money and maybe earn some interest on the side. That is all. As noted, rates used to be better but they are still the place to park money you need on hand regardless of time or stock market situation.

Hence, their point.

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I was moving money around recently and I guess my balance dropped below some threshold and got charged a service fee. That was probably more than the interest I made in the past decade from that account.

I've since found a high yield savings account I'm happy with.

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cuttin_in_farm posted...

You get 1$ of interest after 5 months.

I think you meant 1

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Giant_Aspirin posted...

you can sell part of your investment, sure, but there is still some overhead and a delay there. if i want access to the money in my bank accounts i get it immediately. if i want access to money tied up in investments i need to initiate the sell and wait for the deposit to show up in my bank account which won't happen until the next business day or later.

Hm... I see. So its not linked to my bank like I thought then.

NightRender posted...

I was moving money around recently and I guess my balance dropped below some threshold and got charged a service fee. That was probably more than the interest I made in the past decade from that account.

I've since found a high yield savings account I'm happy with.

May I ask what a high yield account is?

My savings is through Discover and its only at 1.01% right now. And thats an annual percentage. I checked by checking bank, Ally, and their savings is only 1%.

People yap on and on about saving your money. But they should give more incentive.

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savings account is for short-term (e.g., 6-12 months, maybe 18 months to two years at an extreme) savings for emergency expenditures

banks pay **** interest, so if you want a higher yield, stop saving after you have enough to cover bills for the aforementioned time window and start investing

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WilliamPorygon posted...

I think you meant 1

I got $0.20 from my money market account last month. It had $5000 in it

Am I Warren Buffett now

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Ex-Kefiroth posted...

Sadly, 1% IS what is considered "high-yield", these days. These same accounts were offering as much as 2.2% a year ago before the Fed stepped in and started cutting rates again.

If you're willing to put in a bit of effort, there are a lot of banks out there that offer bonuses for opening new accounts, or depositing a certain amount of money for a period of time, or things like that. If you're willing to put some work into it, you can leverage a MUCH better effective rate on your money by doing that, while still avoiding the risks of the stock market.

see: https://www.doctorofcredit.com/best-bank-account-bonuses/

Thats pretty in depth... bookmarking that for when I have more cash. Thanks!

TheMikh posted...

savings account is for short-term (e.g., 6-12 months, maybe 18 months to two years at an extreme) savings for emergency expenditures

banks pay **** interest, so if you want a higher yield, stop saving after you have enough to cover bills for the aforementioned time window and start investing

I like this logic. Savings account is short term. Investment for long term.

I wish I learned about stocks when I was high school. I fucking swear. I thought the shit was gambling. But a lot of options are relatively safe and even when theres a dip, it goes back up eventually. How much more wealth I could have had knowing about this earlier. Jfc.

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i still remember seeing 3-4% interest rates as a kid.

i just looked at my credit union's current rates.

a year-long $2500 CD will make less than working three hours at minimum wage. we are so fucked.

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