61 votes

Why would I ever put my money into a savings account that returns less than the current inflation rate?

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 ...
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  • 75k
58 votes
Accepted

Short term parking of a large inheritance?

"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 ...
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  • 23.8k
57 votes

Transfer over $10k

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 ...
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46 votes
Accepted

How to manage expenditure when billing cycles and paycheck cycles are not aligned?

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 ...
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  • 1,736
40 votes
Accepted

Is it a good practice to keep salary account and savings account separate?

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 ...
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  • 115k
36 votes

How to manage expenditure when billing cycles and paycheck cycles are not aligned?

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 ...
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  • 64.6k
32 votes
Accepted

Who does the money go to if "everyone" in a family dies?

TL;DR State keeps everything. What exactly happens largely depends on the particular state's probate laws. These laws are notoriously complicated and vary greatly between the states. In very rough ...
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29 votes

How much money should I lock up in my savings account?

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 ...
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  • 5,718
27 votes

Why would I ever put my money into a savings account that returns less than the current inflation rate?

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 ...
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  • 5,077
25 votes

Does a savings/checking account sitting at $0 have any drawbacks?

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 ...
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  • 35k
21 votes

Will closing a checking/saving account have a bad effect on my credit report?

I want to know will this has a bad effect on my credit, etc? Closing a checking and/or savings account should have zero impact on your credit score. There is a risk if you close the account, and you ...
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20 votes

Short term parking of a large inheritance?

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 ...
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  • 75k
20 votes

When to stop saving and start investing?

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 ...
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  • 4,037
18 votes
Accepted

Should I use a bank or a credit union for my savings account?

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 ...
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13 votes

What is the purpose of "Regulation D"

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 ...
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12 votes

Can I prove having savings without giving out the account number?

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 ...
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12 votes

Savings account versus corporate bond

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 ...
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12 votes
Accepted

When making an online money transfer, why is one often asked whether the source account is checking or savings?

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 ...
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  • 56.6k
12 votes

When to stop saving and start investing?

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. ...
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12 votes
Accepted

Is there any benefit to keeping money in a checking account?

You said, Whenever I see things like this, they are always tied to moving money from your checking to your savings account. The reason why that's the mechanism they're suggesting is because most ...
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  • 16.8k
12 votes

SwissGap savings platform, is it legit or scam?

Telling you an investment earns 5% per month = scam. No other discussion necessary. Nothing earns that much without being gambling or a lie.
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12 votes

What is the advantage of a Sparbuch, and how does this work?

This is probably mainly for historical reasons. When I was young (born '87 ;) ) and we still had positive interest rates, this was really common. Every child had one and on world savings day one ...
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  • 6,708
10 votes

Why would I ever put my money into a savings account that returns less than the current inflation rate?

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 ...
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  • 952
9 votes
Accepted

Why do sole proprietors in India generally use a current account?

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 ...
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  • 56.6k
9 votes

How much money should I lock up in my savings account?

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): '...
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9 votes
Accepted

What to do with $2115 disposable income per month?

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 ...
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  • 75k
9 votes

Why would I ever put my money into a savings account that returns less than the current inflation rate?

Saving in a bank account that pays less than the rate of inflation isn't a risk. If inflation is 2%, and you get interest of 1%, then you will lose 1% of value per year. That isn't a risk - you know ...
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  • 8,976
8 votes

How can I enforce saving when I have a very limited income?

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 ...
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  • 22.2k
8 votes
Accepted

What is the purpose of "Regulation D"

Regulation D helps regulate the amount of money a financial institution has on hand at any particular time. Savings accounts are not factored into that. Because of that, there has to be a limit on how ...
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  • 10.2k
8 votes
Accepted

What is the purpose of a short term CD that offers lower interest than a savings account?

Very little, as you expected. The CD locks the rate in, meaning you get the rate for sure. The savings account can change any day, so it could fall below the CD's rate. Chances are small, obviously, ...
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  • 37.1k

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