SIGforum
Where's the incentive to save?

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May 23, 2020, 02:59 PM
PHPaul
Where's the incentive to save?
I have a passbook savings account that I use to stash money in for a rainy day.

Currently, the balance is $8400. Since I paid off the tractor, my goal is to get that to a nice round $10,000.

Anyway, the statement came in today and my interest for this month is...wait for it...$0.07

You read that right. 7¢.

So in a year, even with compound interest, I'll earn less than a dollar.

Yes, I know of various vehicles to get better interest, but I need the liquidity. If the back yard turns into Turd Lake tomorrow, I'll need that money NOW. (Say...I wonder if J.G. Wentworth has copyrighted that... Big Grin )

Not really looking for solutions, it just pisses me off to let them use eight grand of my money for nothing.




Be careful when following the masses. Sometimes the M is silent.
May 23, 2020, 03:06 PM
braillediver
.01% interest- Yeah I've got the same account.

I keep it there so I don't buy things on impulse since I have to go to the bank to get the money.


____________________________________________________

The butcher with the sharpest knife has the warmest heart.
May 23, 2020, 03:10 PM
PHPaul
quote:
Originally posted by braillediver:
.01% interest- Yeah I've got the same account.

I keep it there so I don't buy things on impulse since I have to go to the bank to get the money.


That too. It'd be too tempting if it was in my checkbook.




Be careful when following the masses. Sometimes the M is silent.
May 23, 2020, 03:17 PM
RogueJSK
I don't use my savings account as an investment. I use it to keep my "rainy day" stash easily separated.

I have an automatic 10% transfer from each paycheck from checking into savings. Then I don't touch the savings until a big purchase or emergency comes up.

I could achieve the same thing by withdrawing 10% each payday and stuffing it in the mattress, but this way it's all done automatically, plus I can tell with a glance at my online baking what my savings total is, and electronically transfer money from savings to checking if needed.
May 23, 2020, 03:22 PM
bobtheelf
There's no incentive to save when they want you to spend to boost the economy.
May 23, 2020, 03:32 PM
fpuhan
One word: E*Trade (I think that's one word).

I have an E*Trade account. Part of it is cash, and the rest I've put into stocks. I can liquidate a stock at any time, add money to the "piggy bank" whenever I want, and withdraw funds as needed. I'm no genius, but overall, I've made money because the stocks have performed well. Over time, that's generally the case. I make sure I don't peek at my holdings every day, but I get a monthly statement, and even though one month I might show a decrease, my average annual growth is 8%-12%.




You can't truly call yourself "peaceful" unless you are capable of great violence. If you're not capable of great violence, you're not peaceful, you're harmless.

NRA Benefactor/Patriot Member
May 23, 2020, 04:13 PM
BBMW
Not only that, the government is cranking out money like crazy. Look at the chart linked below (it's live, so I can't post the image.)

https://fred.stlouisfed.org/series/M1

Now the economy is in a huge contraction, so even the nearly infinite money creation (it's electronic, now so they don't even need ink and paper) doesn't seem to be creating inflation. But will they stop in time to prevent it?
May 23, 2020, 04:41 PM
sigcrazy7
Why pay you interest when they can borrow money for free from the Fed? The Fed just makes the money. I really don’t understand how gold isn’t going through the roof. If baffles me.



Demand not that events should happen as you wish; but wish them to happen as they do happen, and you will go on well. -Epictetus
May 23, 2020, 05:06 PM
sigfreund
quote:
Originally posted by RogueJSK:
I don't use my savings account as an investment. I use it to keep my "rainy day" stash easily separated.


Same here. I don’t want large sums of money piled up in a home safe.

In addition, all interest rates are low. My bank and credit unions aren’t making a lot of money from what I have deposited with them either. In fact, my concern is that one day they’ll decide that keeping my accounts open costs them more than they make from what I have deposited and will start charging me for the security and bookkeeping.

But although it’s not something I have any influence over, I remember high interest rates and high rates of inflation. I prefer low rates of both.




6.4/93.6

“Wise men talk because they have something to say; fools, because they have to say something.”
— Plato
May 23, 2020, 05:43 PM
pedropcola
You already know this but you aren’t putting it there for the interest. It’s there so you aren’t paying credit card interest when you have to put 4 tires on your car and the a/c goes out in the same week. It’s all the money over 8400 (if that’s your number) that you need to make bank on.
May 23, 2020, 06:29 PM
apprentice
Perhaps use the money to start your loan sharking career that I bet you've daydreamed about a time or two.

Then you'd get interest in spades. Big Grin
May 23, 2020, 06:30 PM
bendable
I will be Mr. Glass half full.

No you didn't make a dime from the bank,
But,

You didn't go " in the hole" by renting a safe deposit box, either.

$24.00 per year, here in tiny town





Safety, Situational Awareness and proficiency.



Neck Ties, Hats and ammo brass, Never ,ever touch'em w/o asking first
May 23, 2020, 07:23 PM
bryan11
Just wait until we're at negative interest rates and you have to pay to bank to keep your money.
May 23, 2020, 08:14 PM
FHHM213
Be careful as for what you ask.

My early 80’s 14% CD was good, but do you want a mortgage at 18%?

For the last couple of decades, our economy, stock market and housing market have been propped up by the artificially low rate environment.
May 23, 2020, 09:27 PM
ChuckFinley
Either don't sweat it or ladder CDs every 2 or 3 months so you get a little more interest, but can have some access at intervals.




_________________________
NRA Endowment Member
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"Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience." -- C.S. Lewis
May 23, 2020, 10:17 PM
jimmy123x
The savings account interest rates have been ridiculous for a few years now (including CD's, bonds, etc.) It's also the reason I think the stock market is over valued as it is.
May 24, 2020, 01:25 AM
Rey HRH
The incentive to save is always there. Be glad interest rates are low. Bank interest rates for savings lag inflation rate. Inflation will eat the value of your savings faster than any interest you might earn.

It’s during times of high inflation that takes away the incentive to save.



"It did not really matter what we expected from life, but rather what life expected from us. We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life – daily and hourly. Our answer must consist not in talk and meditation, but in right action and in right conduct. Life ultimately means taking the responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual." Viktor Frankl, Man's Search for Meaning, 1946.
May 24, 2020, 02:28 AM
wolfe 21
quote:
Originally posted by bendable:
I will be Mr. Glass half full.

No you didn't make a dime from the bank,
But,

You didn't go " in the hole" by renting a safe deposit box, either.

$24.00 per year, here in tiny town


Free with a deposit account @ both banks I deal with. So...


A Perpetual Disappointment...
May 24, 2020, 06:09 AM
sigfreund
quote:
Originally posted by Rey HRH:
It’s during times of high inflation that takes away the incentive to save.


In a nut shell.




6.4/93.6

“Wise men talk because they have something to say; fools, because they have to say something.”
— Plato
May 24, 2020, 07:17 AM
egregore


If your bank doesn't offer it, banks like Capital One or American Express offer rates online in the neighborhood of 1.5%, no minimum balance. You could put a portion, say, a couple of grand, of your money into one of those, or a CD, and make a little more money. And 7 cents (84 cents a year) on $8400? Confused With my credit union I made a buck and a half last year on a $2000 balance. I'm on track to make almost $2 this year. Maybe you need one of those instead of your current bank.

Besides my savings account, for some time I've been putting a little into a "cash cache" to keep at home, in my gun safe. I try to keep it around a grand. It need not be for a true emergency. I've dipped into it to buy a tool for work, a battery for my car, and a gun that was on sale. Razz