Why I don't like the Savings Account Anymore
Years ago everyone thought that the best way to save your money and put it away was in a savings account, but that is no longer the case. It used to be that when you put your money in a savings account it would accumulate interest over the years, and that you would be making good money off of the money that you had deposited in their accounts. Now days the rates of interest that you earn on savings accounts are so small that it isn't even worth putting your money into them. Instead you want to find much more effective was to make money saving your money.
There are a few different reasons why the banks are giving such pathetic interest rates to consumers who put their money into savings account. The first is because the bank usually uses the money that people have saved in their banks to lend out money to other people. They then charge the other people who are borrowing an amount of money interest, and that interest pays back the money that they owe the other investor, and also a profit for themselves. Right now the banks aren't loaning people money, so therefore they can't offer high interest rates for the people who are saving.
Another common reason that the banks are unable to pay high interest rates to those who save money with them is because of the many bank chasers that they will encounter. These are people who will put large amounts of money in the different banks that have good rates, and then all of a sudden the bank is forced to pay a lot of interest on a large amount of money, and they may not be able to do this. The economy has a lot to do with why we are not getting good returns on saving accounts, and the future of savings accounts is looking to get any better.
If you are looking to make some money off of the money that you have, you are going to have to make some investments other than savings accounts to turn a profit. Even credit unions are no longer giving high interest CD's or savings accounts, and this leaves people searching for answers. I don't like savings accounts anymore because it has become almost impossible to make money off of the money you have invested, and there is really no use for them.
For consumers who are looking to invest their money, then opening a IRA of some sort is going to be the better option for you to make gains off of your money. Even a 529 for a child is much more profitable, and these different options are very easy to start. If you aren't making money off of your savings accounts anymore then put your money somewhere else, and start saving smarter today.