Savings - where are you putting it?

[NokOnHarts]

Question regarding normal (not just Disney) savings. Where is the best place to put it these days? I remember back in the "good ol' days" when online savings accounts were giving over 5% interest, now its way under 1%. Is a CD the only place to gain anything anymore? Never cared for CDs as the cash isn't easy accessible but nowadays it seems the only place to get anything back?

ETA: Wanted to add that this is just a general question about ideas, please (of course!) don't respond with any personal information about your own situation.

 

[swilshire]

I had a CD up for renewal this week and the renewal rate was 0.5%.

Sheila

 

[cornflake]

I have some stuff in stuff that's riskier than the bank, and with larger returns but harder to access and some stuff that's easier to access, but riskier and with iffier returns.

I think being creative and diversifying is the best plan.

 

[crisi]

I have some stuff in stuff that's riskier than the bank, and with larger returns but harder to access and some stuff that's easier to access, but riskier and with iffier returns.

I think being creative and diversifying is the best plan.

Me too. I have about 30% in a bond fund. About 60% in stocks - some in mutual funds, some in individual stocks - I've been doing a lot of dividend stocks - some decent companies are paying 5-6%. The rest in cash. But there IS risk in this approach.

 

[Brancaneve]

Since we are earning so little we decided to buy an investment property in a city in California in which there are three universities and therefore a high rental market. We are hoping that we will be able to net a couple hundred dollars giving us a much better return than any bank. Scary venture but could pay off well for us!

 

[Poohbug]

If you really want something safe-stick with the CD's and bank products. If you have a large amount check out the money market rates-sometimes they are better than CD's(and totally liquid).

Make sure you do your homework on CD's. Many of them allow for a one time withdrawal with no penalties. Also many penalties only equal 6 months(or less) of interest. Remember-you only pay a penalty on the amount you withdraw not the total value of your CD.

Some people divide their money between many CD's so that money comes available to them if needed. They have money up for renewal every three or six months for them to use if need arises.

You may want to check out savings bonds. You will have the money tied up for six months but after that you can get it if you need it. They may or may not pay more than CD's.

 

[cornflake]

Me too. I have about 30% in a bond fund. About 60% in stocks - some in mutual funds, some in individual stocks - I've been doing a lot of dividend stocks - some decent companies are paying 5-6%. The rest in cash. But there IS risk in this approach.

I get a higher rate doing p-to-p, with yes risk, but even the lowest risk return higher than that. The immediate liquidity is somewhat lower but...

 

[Sagginit]

under the mattress? well i have one of those traditional savings that just isn't paying anything anymore. my longterm savings is in various money market funds/stocks. i was just talking to a friend about this b/c we are in the same situation trying to figure out where the money should go. we want our ER fund to be liquid but the savings rates drop every month, pretty soon i am going to be paying them to hold my money. i have heard stocks with dividends are a good option right now so i may research that.

 

[ZehnJahren]

I keep my savings in savings accounts and certain stocks. My stocks make up only a small amount of my savings in general, but I've got money invested in something I believe in, so there you have it.

As for my other savings, I have a "holy crap I need a lot of money" high yield savings account (at 1%), a "oh, I need some money" savings account (rate so low I don't even know it), and then another "oh boy let's go to Disney" account for fun savings (it's paid for everything from surgeries, car problems, new tvs, and Disney trips). Then, I have an all-cash "no electricity, no ATM, no problem!" savings in my house with enough in it to get me and DBF out of town to family in a serious national emergency. I can't bring myself to put anything in CDs or bonds; I know I'm losing out on money this way, but I like everything liquid and available.

 

[teCh0010]

Google "rewards checking".

Many smaller banks and credit unions offer checking accounts that pay 2% to 3% FDIC insured on the first $20k to $30k if you meet their requirements. It makes a good place to park emergency funds that you need liquid.

 

[taaren]

A credit union that we belong to (not a local one - one that we have membership through my mom's employer, a large national company), has money market accounts that give 3-4% back on accounts over 10K.

Credit union money markets might be a place to look if you are eligible for some ...

 

[ctinct]

I keep my savings in savings accounts and certain stocks. My stocks make up only a small amount of my savings in general, but I've got money invested in something I believe in, so there you have it.

As for my other savings, I have a "holy crap I need a lot of money" high yield savings account (at 1%), a "oh, I need some money" savings account (rate so low I don't even know it), and then another "oh boy let's go to Disney" account for fun savings (it's paid for everything from surgeries, car problems, new tvs, and Disney trips). Then, I have an all-cash "no electricity, no ATM, no problem!" savings in my house with enough in it to get me and DBF out of town to family in a serious national emergency. I can't bring myself to put anything in CDs or bonds; I know I'm losing out on money this way, but I like everything liquid and available.

Well, to keep this on topic, I'll suggest a rewards checking account. My credit union has one, and I put my savings in there for a while. Unfortunately, I had to move it back to my regular savings account because I found I was too tempted to dip into it when it was in my checking account, but if you are disciplined it could work. I think my rate is close to 3%. (I still get that on my checking account money).

Off topic---totally agree with keeping a bit of cash in the house. I didn't learn my lesson with Hurricane Irene and Snowtober because I had prepared ahead of time with gas and groceries. Last month, though, it was a very scary feeling to start a five hour drive without about seven dollars in my pocket. I was returning my daughter to school, and there must have been a system problem in the atm networks. I tried several banks in several towns, and it was so early in the morning I could not go to any stores to try to get cashback---probably would not have worked anyhow. We took off praying the problem wasn't region wide and that charge cards for gas would work if need be. I think one tank of gas would have been just enough to get there, so if nothing else, our plan was to borrow cash from her dorm mates so I could buy gas to return home. Gotta tell you, it was a little scary and definitely an eye-opening experience. (We were able to get cash in another state.)

 

[crisi]

I get a higher rate doing p-to-p, with yes risk, but even the lowest risk return higher than that. The immediate liquidity is somewhat lower but...

I'm not familiar with the term p-to-p (other than peer to peer, and I don't think you inventing in bit torrent.....).

 

[fakereadhed]

Sock drawer.

Seriously now, with interest rates so low there aren't any great options.

 

[LeslieG]

After reading this thread, I checked appx. 10 credit unions in my area, and none of them offer any interest rate over .5%. Any more tips on how to find a bank/credit union that is paying 2 - 3%?

 

[GAN]

After reading this thread, I checked appx. 10 credit unions in my area, and none of them offer any interest rate over .5%. Any more tips on how to find a bank/credit union that is paying 2 - 3%?

Heck, they're lending money at close to those rates ...if anyone finds a bank in America even close to 2% please let us know.

 

[ctinct]

Check out their checking accounts, not savings accounts. Look for things like "bonus" checking, "rewards" checking, checking "plus", etc. My savings account actually pays far less than my checking account at my credit union. Also, there are out of area credit unions that you may qualify to join, if there are none available in your area. Maybe some personal finance sites might have a list of high interest checking accounts. Be aware that there are usually strings to these accounts. For example, I have to have at least one direct deposit and ten atm transactions a month, otherwise my interest is not as high. That's never been a problem for me.

My credit union is only open to people in this area who work or have a family member who work in a certain career, so I can't help you out with a name. I bet with some more digging, though, you could come up with something. Good luck.

 

[hsmamato2]

Well, to keep this on topic, I'll suggest a rewards checking account. My credit union has one, and I put my savings in there for a while.

Off topic---totally agree with keeping a bit of cash in the house. I didn't learn my lesson with Hurricane Irene and Snowtober because I had prepared ahead of time with gas and groceries.Gotta tell you, it was a little scary and definitely an eye-opening experience. (We were able to get cash in another state.)

I didn't learn from Irene, but after Snowtober I learned....full emergency supply(OT I know) and cash in hand just in case! I think we may bank at the same CU IDK but for our family right now keeping afloat with an emergency cushion is ok with me,anything beyond that is not in the cards for us anyway so interest rates aren't factor

 

[Muushka]

Anyone thought about investing in silver? We are going to look into it.

 

[cornflake]

I'm not familiar with the term p-to-p (other than peer to peer, and I don't think you inventing in bit torrent.....).

Heh, is peer-to-peer, but lending (money, not files). It's been around a number of years, working off the Kiva model, if you know Kiva (which is a charitable thing in which large groups basically make personal microloans to needy people around the globe).

The idea is that people can submit their details and request a loan, a site does an initial review, and if acceptable, offers the loan to members at a particular rate over a particular term based on the prospective borrower's credit score, credit utilization, income, etc.

Then, the loan goes up on the site and investors can look at the details, ask the borrower questions and choose to invest or not, in increments of $25.

Generally, the rates are lower than they'd be from a bank and the loans are easier to obtain in the current climate. Most people prefer that the interest they're paying goes to actual people rather than a megabank and from the investor's side, people can pick and choose who to invest in, at which risk level (excellent credit scores, low utilization, etc., have lower interest rates, lower risk of default), and their investment goes to help real people who need the money.

There is risk, borrowers can default - the sites will go after them but ppl declare bankruptcy and etc., and you can lose your investment in them. Also, your money is not liquid. You get $ back every month as liquid, but it's paid back in the fractional amounts per investor, so you get like cents back per loan - though it adds up if you have a bunch of loans.

There's also a trading platform, to sell your shares in the loans to other borrowers, should you want to liquidate.

Anyway, there are a couple of big companies been doing it if you're interested.