Investing Basics: Savings Accounts
Investing Basics: Savings Account
A typical savings account is your simplest form of earning some interest on your money. It’s simple to open and virtually effortless to maintain, and it gives you a high liquidity, which means you’re able to access your cash quickly. There is, however, an issue with putting all of your saved money in a savings account. The interest rate you’ll get from your savings account will be extremely low, ranging from 0.06% – 1% at best! So even though opening a savings account may be a good first step for those who don’t have much saved, this should not be looked at as a long-term option as you go forward. Because of terribly low rates, today’s savings accounts are more or less your grandmother’s “under the mattress” saving options.
Quick word of caution: please make sure you know the fee structure for maintaining your savings account. Especially if your balance goes below a specified limit. You may end up paying more in fees than earning interest!
Today's tip brought to you by Mvelopes and Money4Life Coaching.
Originally published August 13, 2018.
