If you’re a big savings account guy or guy, this article may feel like the teacher who runs her finger nails down the chalk board. It will feel that way because I’m going to explain why savings accounts are not good, especially in todays market. If you have one; do not fret I’ll show you how to make something out of nothing with that savings account of yours
Inflation is killing savings accounts today and this is the number one reason why you want to ditch the savings account. You have to think about it this way; you put hard earned money into an account that is giving you 1% annual returns; but the US Dollar is losing value at 5%, what is your money really doing? You are not saving anything, you are losing. This is predominantly why a savings account in this time period is absolutely a total waste of your time. There are plenty other things you can do with your money and well talk about a few in a moment.
Savings accounts give poor yields today and that reason alone is the reason you do not want to deal with them now. Ally Bank is giving you back 1%, ING Direct is doing it big with a 1% return on your savings. If you go down the list of banks and their gracious giving, youll find astonishingly that the best return was a whopping 2% by Ultima Bank and that was as of June 9th 2011. With poor yield as these people are running to CDs or certificates of deposits help bump up their rates. That move moves the big bear only two notches as CDs are also only giving back 5 or so percent; and that is if they are a good one.
You can do better with other investments moves; you can dabble in tax lien, real estate investments, government bonds, and many other moves. Some of these carry higher risk and have some level of educating yourself about them; but it is better than being simple and dumping money in a savings account that currency wise is losing you money. I personally keep just 500 to 5000 bucks in my savings accounts and if you do more that is fine the point is that you can make your money work much harder for you than what a savings account will do for you. This is why a savings account is practically of no use today and it really revolves around the horribly low returns they yield and the factor of inflation.
Without inflation then it would be a simple silly financial move to keep money in a savings account today. Be wise and do something for yourself and look for better accounts to gain better financial gains.