62
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 ...
- 79.6k
61
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 ...
- 145k
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 ...
- 1,746
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 ...
- 142k
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 ...
- 71.2k
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 ...
- 436
31
votes
Why should I not keep my checking account at $0 and use overdraft protection?
There are several issues with this plan.
The financial institution may limit the number of free overdrafts they allow. After that they charge a fee.
When they cover a check/debit card transaction ...
- 145k
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 ...
- 5,768
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 ...
- 5,107
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 ...
- 35.9k
25
votes
Are demand and time deposit accounts really loans _to_ the bank?
Yes.
When you deposit a sum of money into a bank account, that account is an asset for you. At the same time, it is a liability for the bank.
Let's say that you are depositing $1000 to your bank ...
- 116k
23
votes
Accepted
What's up with banks closing down their high yield savings accounts and incentives lately?
Generally high yield savings accounts are used by banks to increase the deposit base. The banks are required to keep a certain ratio of loans outstanding to deposits in the bank, and paying high ...
- 184k
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 ...
- 4,107
20
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 ...
- 145k
20
votes
How are the banks behind high yield savings accounts able to pay such high rates?
How are the banks behind high yield savings accounts able to pay such
high rates? Where does their yield come from?
The money deposited in the checking accounts, savings accounts, high yield accounts,...
- 145k
16
votes
Why should I not keep my checking account at $0 and use overdraft protection?
Aside from the other answers, which are very good, there is this. Your savings account likely gains interest at a ridiculously small rate, less than 1%. Unless you have many thousands of dollars in ...
- 2,161
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 ...
- 145k
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 ...
- 30.2k
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 ...
- 57.2k
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.
...
- 955
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 ...
- 17.1k
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.
- 43k
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 ...
- 7,462
12
votes
pending recession: keep money in 401k or savings account?
You are asking whether you should withdraw money from your 401k because you are concerned about economic downturn which might cause your investments to decline in value.
No. You should not.
The reason ...
- 3,170
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 ...
- 970
10
votes
Why should I not keep my checking account at $0 and use overdraft protection?
I know I once got warned about drawing from my savings account too many times within a certain amount of time (maybe four times in a month and a fifth would have triggered a fee). If you have similar ...
- 829
10
votes
Are demand and time deposit accounts really loans _to_ the bank?
Conceptually, yes, we are lending our money to the bank, and it is leveraging those loans to make other loans at higher interest rates.
It differs from most loans in that we can increase or decrease ...
- 51.4k
10
votes
Are high yield savings accounts as secure as money market checking accounts?
It's actually the other way around: a savings account (high yield or otherwise) is likely to be insured by the FDIC. We can't verify without knowing the exact account, but this should be prominently ...
- 762
10
votes
Advice for investing money for a 15-year old
Note that if your child makes more than £100/year in interest from money you give them, then you have to pay tax on it anyway. [A previous version of my answer talked about £100/month because I got ...
- 30.2k
Only top scored, non community-wiki answers of a minimum length are eligible