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59

Why? Because the two are unrelated. "Inflation rate" is calculated by measuring changes in the consumer price index (CPI). Your personal consumption may not match the CPI and the inflation you experience is likely quite different than what the CPI indicates. A great example of this is "rents". If rents increase, but you own your own home, does that ...


58

"Safe short term" and "pay almost nothing" go hand in hand. Anything that is safe for the short term will not pay much in interest/appreciation. If you don't know what to do, putting it in a savings account is the safest thing. The purpose of that isn't to earn money, it's just to store the money while you figure out where to move it to earn money.


56

However, I heard that government monitors transfers of over $10K No this is wrong. They want to know about cash or cash equivalent transactions over 10K, or small cash or cash equivalent transactions that are structured to look like they are under 10K. So if you write a check to move the money, or you move the money electronically, the government doesn't ...


46

It sounds like the problem is that when your husband got paid twice a month, his paycheck was large enough to cover the bills in full so you were able to pay them right away, then you could use the rest of the money for optional expenses like entertainment, or you could cut back on variable expenses like groceries. Now that he's being paid weekly, a single ...


40

This seems like a risky setup. All it takes is one missed or delayed transfer for you to overdraw your "savings". There is a benefit to keeping your regular expenses and savings separate, and I can see some benefits in having multiple checking accounts depending on how you organize your finances, but I don't see a benefit to having a paycheck go to one ...


37

It depends on your bank's terms (which may in turn be influenced by laws and regulations), but most banks calculate interest on a per-day basis, so if you leave the money in the account for more than a day, it will generate interest. However, it will most likely be so little that you could make more money doing any kind of paid work in the time it took you ...


36

The ideal state is one in which it doesn't matter when either of you get paid. Where you use last month's income to pay this month's expenses. The starting place is a simple budget. You know when money is coming in, and you know when your fixed expenses are due, so just map it out on paper/spreadsheet to know how much of each paycheck needs to go to which ...


29

Firstly well done on building a really sold base of savings. An emergency fund needs to have two key characteristics: Be enough to get you through a typical emergency event (often seen as approx. ~6 months’ salary in your style of situation assuming you have no dependents etc) Be liquid and available to you instantly if an emergency arises Once you have ...


25

The main concern I'd have is that something will happen to the account while it's unattended. While you may not have any money in it to risk, you could have a fraudulent check written against it that causes you to incur NSF fees. Your bank also might change its no-fee policy (I assume these are no-fee accounts, or there's an obvious drawback). If it does, ...


24

You keep money in a savings account so that you know you can access it at any point, and that it will always be there. It is diversification of risk. If you have the money in equities instead, you can access it relatively quickly in this day and age, but it may not be there when you need it. The common example is losing your job during a recession. If ...


20

I am sorry for your loss, this person blessed you greatly. For now I would put it in a savings account. I'd use a high yield account like EverBank or Personal Savings from Amex. There are others it is pretty easy to do your own research. Expect to earn around 2200 if you keep it there a year. As you grieve, I'd ask myself what this person would want ...


19

Given your specific situation, being debt free and in Germany where there are supportive social structures in place for potential unemployment etc, I would consider the following: Depending on your industry and how easy it is to get a new job if suddenly let go, have a small emergency fund. Nothing fancy needed especially if you live in a city where public ...


18

Your instructor's numbers do not seem to have any basis in current reality. At this page you can see a comparison of interest rates offered by banks and credit unions. In the most recent table for June 2014, banks paid an average interest rate of 0.12 percent on savings accounts, while credit unions paid an average of 0.13 percent. If you look back ...


15

Banks work pretty hard to make themselves a big part of your life with bill pay, auto-deposit, loans and other services. You need to carefully unwind each one and be on the lookout for fees. If you close a savings account, will your checking account suddenly have fees? If you stop auto deposit, will there suddenly be a fee? Setup your new account ...


15

Ditto @MichaelBorgwardt Just to get concrete: I just checked one bank in India and they say they are paying 4% on savings accounts. I don't know what you're getting or if 4% is typical in India, but it's at least an example. So if the bank pays interest based on average daily balance, and you left the money in the bank for a week, you'd get 4%/52 = .077%. So ...


13

Let's divide all bank accounts into savings and checking. The main difference is that checking is easy to get money from; savings is hard to get money from. Because of this, the federal Reserve requires that banks keep more money on hand to cover transactions in checking accounts. Here is a related question from a banking customer regarding a recent notice ...


12

Giving out your bank account number is not generally a security problem. The first time you write your landlord a security deposit or rent check, he'll have your account number. (It's printed on the check.) That having been said, in my experience, banks do not generally give out balance information to just anyone who calls them up and gives them an ...


12

why one is often asked whether the source account is checking or savings? Some of this is legacy. Once upon a time Account Number were repeating for Savings and Checking [as well as Currency]. Hence the Account type together with Account Number was unique. However in recent times, all banks have unique account numbers. Most clearing formats; for example ...


12

Here's the general order of things: Keep 3-6 months of expenses in a savings account for emergencies (lose your job, car accident, mauled by dingos, etc.) Pay down all your debt as fast as possible. Make sure you're contributing ~15% to your 401k, IRA, or similar personal retirement account. Invest everything else into a brokerage account for long-term ...


11

For some people, it's easier to stick to a budget if they have separate checking and savings accounts because they can deposit funds directly into their savings account and not have those funds accessible by debit/credit card, checks, etc. This allows people to pay themselves first and accumulate savings, while making it slightly more difficult to spend ...


11

The bond will rank below depositors, so it's riskier than the savings account. The savings account is very safe if you have less than £75,000 in accounts with the bank, as then it would be covered by the deposit guarantee Financial Services Compensation Scheme. Also note that bonds tend to have a fixed maturity whereas savings accounts usually let you get ...


9

As long as you are disciplined about it, you can certainly have your emergency fund and other savings funds in one account. Multiple accounts may incur added costs, since you may not have the minimum balances to avoid the fees. Some banks provide tools or account features to help track separate "buckets" of funds within one account. One important ...


9

So for each thousand dollars saved you will earn $1.50 more each year. It is up to you to decide whether it is worth the hassle.


9

The key is that you need to use your debit card to earn the higher interest rate. The bank can offer a higher interest rate on accounts connected with a debit card because: They earn additional income through debit card fees charged towards account holders, among other things. They offer the higher interest rate specifically to encourage people to use their ...


9

One issue which I don't see addressed in the answers so far is how to structure bank accounts to get the highest return possible. What you're describing sounds like a certificate of deposit (CD): 'ranging from 1% for 9 months to 2.3% for 5 years' There is a concept which was once more common called a CD Ladder, which still allows you to access your money,...


9

If your goal is to have a 400K net worth, in 11 years, and you invest 2144 the entire time you will need a rate of return of at least 6.4%. This is assuming that you have zero net worth now and it does not consider your house. Obviously the house will be worth some amount, and the mortgage balance will go down. However, it cannot really be calculated with ...


9

Any store of value has some risk of being outpaced by inflation, as measured by some other asset. For instance, you might invest in property, but find that the cost of a loaf of bread has gone up faster than the value of property. Wherever you put your money, you're therefore weighing up the risks and benefits: The limitations on when you can put money in ...


8

These rates are so low because the cost of money is so low. Specifically, two rates are near zero. The Federal Reserve discount rate, which is "the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility--the discount window." The effective federal funds ...


8

You can't both enforce saving and have access to the money -- from what you say, it's clear that if you can access the money you will spend it. Can you find an account that allows one withdrawal every six months but no more, which should help to cut down on the impulse buys but still let you get at your money in an emergency?


8

No. Current account is not a requirement. You can use savings account. You would need to pay taxes on interest. Savings account have limitation on number of withdrawal in a quarter, hence most sole proprietorship have current account. Edits: Historically the withdrawals were by Slips/Cheque. The restriction was on these and not on standing instructions. ...


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