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... )

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

.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.

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.

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.

There's no incentive to save when they want you to spend to boost the economy.

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%.

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?

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.

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.

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.

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.

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

Just wait until we're at negative interest rates and you have to pay to bank to keep your money.

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.

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.

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.

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.

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...

quote:

Originally posted by Rey HRH:
It’s during times of high inflation that takes away the incentive to save.

In a nut shell.

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? 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.