Voski Posted January 25, 2008 Share Posted January 25, 2008 Everytime I go to the bank the tellers are always trying to get me to open a savings account which I use as a great way to flirt with the hot chicks. But seriously this time I actually did some reasearch and the BOA I can oppen has a .20% interest which means if I put in $1500 I will end up with $1503 at the end of the year?I have also heard about high interest online savings that use your current checking account or something like that. Can anyone give me a quick breakdown? Link to comment Share on other sites More sharing options...
r1v3th3ad Posted January 25, 2008 Share Posted January 25, 2008 I dunno, I use a saving for money that is to be untouched, as in my bills...every pay, I transfer from my checking to my savings, the amount I will need for bills for the month or even this and next month. That goes untouched no matter what. Once bill payment time comes around, I note how much is in checking, transfer the money from savings to checking, then send out my checks. Helps a lot, and I always like the free money...PNC bank does something other than the once a year interest. So, I used to transfer all my money into my saving right before this timeframe and collect on all my monies. However with being in school, I'm too lazy to pay attention, I don't even get my statement, it goes home to pittsburgh. I do everything online, including my log.overall, I think that a savings account is a + if you can link it with your checking account fee free like me. Link to comment Share on other sites More sharing options...
mdl Posted January 25, 2008 Share Posted January 25, 2008 If you're looking to actully save money and earn a higher yield you may want to look into bonds. The reason a bond will yield a higher return is because it "locks" your money for a specific period of time and the higher interest rate makes up for the fact that you cannot access your money.The reason your local bank doesn't offer a high interest rate is because you can remove your savings in the short run (6 months or so). Also I think the tellers get "points" for opening savings accounts which helps the bank. People who open savings accounts generally don't withdraw their money as often as a checking and so the bank is less likely to run out of money and have to borrow from another bank.If you want a high yield online account look into ING Direct. I think they are currently offering 3.65% yield on their savings accounts. The issue with the online banks is that it is harder to access your money if you need it fast. It takes upwards of 4 days to make a withdrawl and have it clear into your regular bank account. I've had an ING direct account for over 4 years now and the interest rate has been as high as 4.25%. Link to comment Share on other sites More sharing options...
Bryantos Posted January 25, 2008 Share Posted January 25, 2008 Its best to call your bank and ask them yourself.I did because I also didn't see a point, but the lady explained it to me and I understood a shitload better at the time, but I forgot most of it, lol.Higher interest rate, better money organization like rivet said, and I believe the ability to withdraw more money (A set amount from savings and then another set amount from checking) in one day.Thats all I can really remember though. Link to comment Share on other sites More sharing options...
Voski Posted January 25, 2008 Author Share Posted January 25, 2008 I crave to know more. My fucking school doesn't have any personal finance classes =( Link to comment Share on other sites More sharing options...
r1v3th3ad Posted January 25, 2008 Share Posted January 25, 2008 another great thingWith a savings account, lots of banks provide(for a small fee) overdraw protection for your checking.Say you have 2 bucks and didnt know that. You use your debit card to buy some smokes for 4.25Next thing ya know, you check your account the next day and see that you overdrew by 2.25 and they charged ya 30 bucks as an overdraw fee.With this protection, the minute you go over, they compensate from savings so you dont have to pay the 30 Link to comment Share on other sites More sharing options...
ahwahoo2006 Posted January 25, 2008 Share Posted January 25, 2008 Yes, you are essentially correct. If you open a savings account and put some money in and don't touch it, you will have more money than what you started with at the end of the year. It is not, however, a straight percentage (i.e. if you put $1000 into a 1% savings account you will not have $1010 at the end of the period). You can get rather high rates with many banks now, some in the 4%-5% range (online ones mostly)Interest is calculated by the formula A = P(1+ (r/n))^nt, where P is the principal, r is the rate, n is the number of times interest is compounded, t is the time in years, and A is the final amount. So, lets say you put $1000 into a 3% savings account that is compounded monthly, you get: A = 1000(1+(.03/12))^(12*1) or $1030.42. Hope that helps a bit. Link to comment Share on other sites More sharing options...
Voski Posted January 25, 2008 Author Share Posted January 25, 2008 do you guys recomend any of the online ones? I'm looking at ING and E-trade right now Charles Swab has a pretty good rate too ATM Link to comment Share on other sites More sharing options...
r1v3th3ad Posted January 25, 2008 Share Posted January 25, 2008 If you have a pnc bank based in your area, I highly recommend them.They have online and I do mostly online other than occassional cash withdraws...debit is free, but withdraw from another institution's atm is not free(unless you have x amount of money in your account at all times, I think its 1000 dollars). Link to comment Share on other sites More sharing options...
anathema Posted January 25, 2008 Share Posted January 25, 2008 CODs? Drop an untouched 5k for 6 months and get ~4% interest a year. Link to comment Share on other sites More sharing options...
Ralleac Posted January 26, 2008 Share Posted January 26, 2008 (edited) QUOTE (r1v3th3ad @ Jan 25 2008, 07:32 AM) <{POST_SNAPBACK}>With this protection, the minute you go over, they compensate from savings so you dont have to pay the 30With Wells Fargo, U.S. Bank, and B of A, that protection costs $10 every time it happens. That isn't as bad, but most banks can set it up so that a credit card is charged whenever you overdraw your account. If you can pay that card off in time at the end of the month, it ends up costing you nothing. Edited January 26, 2008 by Ralleac Link to comment Share on other sites More sharing options...
SafeSearchOff Posted January 26, 2008 Share Posted January 26, 2008 i didnt really read everyone elses posts...there are Savings Accounts and CD's. Both return your money to you, with interest on it. Savings Accounts have a lower interest rate, but you can get your money at any time. CD's are closed off COMPLETELY for a set period of time, but at a MUCH higher interest rate. However, most banks require a pretty steep minimum deposit if you are opening a CD.Essentially, Savings Accounts and CD's are you loaning your money to the bank. The bank then takes your money and say, gives it to some1 else in a mortgage. They can afford to pay you your money back with interest because of the interest earned on their services like mortgages. Link to comment Share on other sites More sharing options...
Canon Posted January 27, 2008 Share Posted January 27, 2008 i put everything in my savings account and pay my bills from thereinterest i get is 2.57 apy Link to comment Share on other sites More sharing options...
SafeSearchOff Posted January 27, 2008 Share Posted January 27, 2008 i have a friend who just keeps running 6 month CD's. he started off with 1.5 grand and he got it up pretty quick. Link to comment Share on other sites More sharing options...
Canon Posted January 27, 2008 Share Posted January 27, 2008 QUOTE (SafeSearchOff @ Jan 27 2008, 11:37 AM) <{POST_SNAPBACK}>i have a friend who just keeps running 6 month CD's. he started off with 1.5 grand and he got it up pretty quick.whats he up to now? Link to comment Share on other sites More sharing options...
SafeSearchOff Posted January 27, 2008 Share Posted January 27, 2008 (edited) im not sure ill ask him tomorrowedit: at the beginning of hte year he said he was up to 6 or 8 i think Edited January 27, 2008 by SafeSearchOff Link to comment Share on other sites More sharing options...
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