OT - Savings accounts?

[adventure_woman]

I am proud to say that we almost have 2 months of expenses saved in our savings account. I know it isn't the recommended amount, but it is better than what we had before. What should I do with the money now? Just leave it in a low interest savings account for really easy access just in case? Should I ask my credit union about CDs or something? (I'm not looking to switch banks or anything like that). Just ask my CU what they recommend? What do you guys do?

Thanks!

 

[LuvOrlando]

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[NikiM20]

Credit Unions a Federally insured, just like a bank, but by the NCUA instead of the FDIC. We have all of our accts at a credit union and loans etc. Here is a link to the NCUA http://www.ncua.gov/ You have NOTHING to worry about as far as losing your money

 

[Karenj2]

Hmmm... I'm not sure. We use an ING account, and I have a few different accounts: General Savings, Christmas Fund, Emergency Fund and Big Ticket Items. (Each with varying amounts.) We also have a checking account where we leave some money in and move money through (deposits in, bills out).

The General Savings is used if we need it for various things and Christmas is kinda a no brainer - it's only used for Christmas gifts, etc. The Emergency fund is where we have $$ stored that we are not to touch unless one or both of us lose our jobs. We're working on having a full years' expenses saved up. The big ticket items is generally really small, until we have something we want to get.

Anyway, to get to the point - these are just savings accounts. If the money you're saving is for emergencies, you'll want to have it more easily accessible than in a CD, etc. If you know you're not going to need the money, by all means go ahead!

And congrats on the savings!! In this economy, that's a great thing!!

 

[ceecee]

Credit Unions are REAL banks and are FDIC insured as well. Most aren't in financial turmoil as some "real" banks are. Check into a money market, our CU is paying a big 2%. They also have a super saver club that pays 7% on your first $500.00.

 

[BellyBaby]

I'd put half in a high interest savings, half in something you can access immediately. by the time you go thru the first half, you'll then be able to access the other without penalty. Plus it will deter you from "dipping" into it without a VERY good reason. A hot water tank going is not a good enough reason. Just scrape by that month. that way you won't dip in for all the "little emergencies".

Congrats!

 

[VAN]

We also "bank" at a Credit Union. I love it ... we don't get nickle & dimed like a bank does and we get superb service.

Anyway, if you have just 2 months saved, I'd keep it in the savings account where it is accessible. We also have extra money and keep a chunk accessible and "surplus" into 6 or 12 month CDs. The interest rates are all low right now, so you really aren't missing out on that much interest by leaving it in your savings. My opinion, anyway.

Congratulations, by the way, on your savings!

 

[PinkRhombus]

I know you said you do not want to switch banks, but a Credit Union is not a bank, and as such is probably not FDIC insured. As a result it would also follow that your CD would probably not FDIC insured.

I don't know where you got that idea from.

Per our credit union's website "Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. National Credit Union Administration, a U.S. Government Agency"



To the OP: The only downside to CD's is that you would pay a penalty for cashing it out early. For your emergency fund, even of this type, we wouldn't put it in one of those.

But there are various types of savings accounts offering different types of interest depending on your balance and usage. You could put that money into a money market account.

 

[wall*e2008]

If you want to keep it at your CU then do ladder CDs.

Say you have $20K for emergencies. You could open 4 $5K CDs at the same time. Make the first one a 30 day CD, then second a 60 day CD the third a 90 day CD and the last a 120 day CD. This way you have access to $5 every month. When a CD comes due then make it a 120 day CD.

 

[LuvOrlando]

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[dhardawa]

I keep all my savings in an ING account. It typically pays about what CDs pay, but the money is accessible if I need it. It takes about 3 days for it to transfer to my bank account.

 

[nowellsl]

I use Ally Bank, which used to be GMAC Bank until really recently. I have a money market account there which comes with an ATM card and checks (pays 1.9%) and I have an on-line savings account which pays 2.25% that I keep most of my savings in. I can transfer from online savings to money market savings and then withdraw from an ATM or write a check if I need to. They are also offering a no penalty CD which pays 2.5% that I'm thinking about putting some in. I keep a minimum savings account with my local Credit Union but it pays next to nothing in interest.

These are all FDIC insured!

 

[NikiM20]

Easy there, I got the idea because it is a fact, plain and simple, that MOST institutions ARE NOT FDIC insured. If you read correctly there were a whole lot of probablys and maybe's peppered into my writing, not just here but as part of my vernacular. My language is not an accident. I use terms that are not final because the OP did not state where exactly it was going. But I guess those sorts of subtleties are lost on some

A Credit Union is still not a bank, if it was a bank it would be called a bank.
http://en.wikipedia.org/wiki/Credit_Union

If they are called a federal credit union they HAVE to be licensed and insured by the NCUA. (See my previous post) All credit unions are insured.

 

[CrzyforPiglet]

When the rate on our ING savings account dipped really low I moved about half of our savings into three separate CDs through GMAC bank (now Ally). We chose to do 6, 9, and 12 month accounts to see how we'd do and just in case we need the money then one of the accounts will come due in Sept. We'll decide then whether or not to roll the account into another CD or if ING rates come back up we may put the money back into liquid savings.

 

[eyeheartgoofy]

We keep our emergency fund in a plain old savings account at the local bank and have for the past 11 years. I'm not trying to earn money on this money -I just want it safe and easily accessible.

 

[nowellsl]

When the rate on our ING savings account dipped really low I moved about half of our savings into three separate CDs through GMAC bank (now Ally). We chose to do 6, 9, and 12 month accounts to see how we'd do and just in case we need the money then one of the accounts will come due in Sept. We'll decide then whether or not to roll the account into another CD or if ING rates come back up we may put the money back into liquid savings.

I kept my ING account open with a small amount in case they ever get competitive again..... I've been thinking about closing it since they just aren't competing with other online banks, especially Ally. Now with this no penalty CD Ally is offering I may just go with that. I hate to commit to a 12 month CD because I'm hoping interest rates will start going up soon I may be just dreaming though...

 

[Allisdad]

If I may interject, I have a good friend in the banking industry and this exact question came up. First off most Credit unions right now are safer than banks, because they are mainly owned by their members instead of a small board of directors. (Please don't take this as banks are not safe).
As for what to do with the money, right now most credit unions are giving pretty good interest rates on savings accounts IE: Christmas, vacation funds. You also don't have to worry about losing money as can happen in some CDs. Right now I would leave the money in savings until the economy picks back up and CD rates jump as investors start to put their money in play. Just my opinion though.