High Yield Savings

rags747

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I don't think this forum should be a place where investment recommendations are made.

Banks are getting shuttered right and left.
100% correct and yet we were told that the Rouble will be Rubble! How wrong they were And it is quite lovely to see.
 

rags747

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I think there’s a lot of grown adults that don’t realize if you’re parking your money in a money market savings account longterm from one of the major banks that’s only giving like a .30% APY, you’re losing money.

The average rate of inflation in a healthy economy is 2-3%.
These are the people that should not be allowed to vote, they add nothing.
 

rags747

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This isn't a place for specific financial advice.

-Hey buy Stock X
-This is a killer new crypto
-Wanna hear about real estate opportunity?

No. No. No.

Ask Tom Brady, after his $45 million loss with FTX. This stuff doesn't belong here.
This is the Off Topic section of this board. Investments are definitely Off Topic from the main purpose of this board. Most topics outside of football are not allowed on this board, I’m not sure that investments have been outlawed as of now, that will probably now change based on past actions.
 

CalPolyTechnique

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This is the Off Topic section of this board. Investments are definitely Off Topic from the main purpose of this board. Most topics outside of football are not allowed on this board, I’m not sure that investments have been outlawed as of now, that will probably now change based on past actions.
There’s a fundamental difference between a savings account and an investment account.
 

T-RO

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3 banks total this year.

Today is the 141st day of the year.
3 U.S. banks in the last two months. In Europe the 2nd biggest Swiss bank, Credit Suisse, went under. Then you have entities like FTX tanking.

People should be very thoughtful about their savings and investment. Online advice from strangers (you think you know people here--but you don't) is not sound practice.
 

Creeper

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I think there’s a lot of grown adults that don’t realize if you’re parking your money in a money market savings account longterm from one of the major banks that’s only giving like a .30% APY, you’re losing money.

The average rate of inflation in a healthy economy is 2-3%.
Remember, for a long time after the 2008 crisis the government was lending banks money for 0%. The banks are really doing a number on us.
 

John813

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I don't see the point of derailing a simple thread like this.

Don't care for the topic, leave.
I've sold a handful of stocks over this year and have been looking at throwing some of the money into another bank with a high APY.

Seen 4.2%, cool to know some are pushing 5% now.
 

CalPolyTechnique

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I don't see the point of derailing a simple thread like this.

Don't care for the topic, leave.
I've sold a handful of stocks over this year and have been looking at throwing some of the money into another bank with a high APY.

Seen 4.2%, cool to know some are pushing 5% now.
Thank you.

Like I said, there are people that don’t understand the fundamental difference between a savings account and an investment account.

Putting money in a high yield savings account is not an investment and is FDIC insured (at least at reputable banks).

Investing money into the stock market, be it equities, bonds, indexes, et cetera, is an at-risk venture.

So while I can understand the general concern and consternation, it’s completely misguided.
 
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CalPolyTechnique

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Back to the topic, high yield savings accounts are useful for people that want the flexibility of parking large sums of money they don’t plan on touching and letting it accrue interest without the penalties and inflexibility of a CD.

You can pull and transfer your money at anytime because it’s a savings account.
 

Creeper

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3 U.S. banks in the last two months. In Europe the 2nd biggest Swiss bank, Credit Suisse, went under. Then you have entities like FTX tanking.

People should be very thoughtful about their savings and investment. Online advice from strangers (you think you know people here--but you don't) is not sound practice.
Some banks are just poorly managed. Credit Suisse has been having problems for years. It is no surprise it is where it is now. Silicon Valley was a lesser known but run just as poorly. Again, this was the failure of management not a systemic issue. First Republic was too tethered to SVB. Again, this was a management issue. I recall in 2008 everyone was saying get your money out of the big banks and stick it in local banks, regional banks and even credit unions. But many of those banks went under too, just no one noticed. Many needed bailing out. Big banks are safe because they are big and diversified.

The saying is "do your homework", and this applies to banks too.

There are always Treasury Bonds. They are state and local tax free (which may be something if you live in a state with high income taxes, not Texas) and now you can get about 4.3%. Series I savings bands are paying a rate like that now and they adjust with inflation. Of course all treasury notes have terms so your money is not liquid as a savings account.
 

rags747

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Thank you.

Like I said, there are people that don’t understand the fundamental difference between a savings account and an investment account.

Putting money in a high yield savings account is not an investment and is FDIC insured (at least at reputable banks).

Investing money into the stock market, be it equities, bonds, indexes, et cetera, is an at-risk venture.

So while I can understand the general concern and consternation, it’s completely misguided.
I would argue that if you are looking at savings accounts to park your money and you are comparing rates of return then you are making an investment. In my mind any time that you put your money to work for you you are making an investment. Yes the savings acct is most likely covered by fdic but you are still making an investment. As far as people not understanding the difference between the two there is not much really to be said. This is basic entry level knowledge imo.
 

CalPolyTechnique

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I would argue that if you are looking at savings accounts to park your money and you are comparing rates of return then you are making an investment. In my mind any time that you put your money to work for you you are making an investment. Yes the savings acct is most likely covered by fdic but you are still making an investment. As far as people not understanding the difference between the two there is not much really to be said. This is basic entry level knowledge imo.
Yeah, I suppose as you described it would be an investment.

I use the term more colloquially to mean the allocation of money toward something with the intent of making more money and with the implicit understanding that profit is not guaranteed and inherently risky.

Generally speaking, I think most people view a savings account as a safe place to keep their money rather than a money making venture.
 

Creeper

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Yeah, I suppose as you described it would be an investment.

I use the term more colloquially to mean the allocation of money toward something with the intent of making more money and with the implicit understanding that profit is not guaranteed and inherently risky.

Generally speaking, I think most people view a savings account as a safe place to keep their money rather than a money making venture.
I agree with this. Savings is putting money away for the future with the expectation that it will be there when needed. It doesn't make or lose money. It tries to keep up with inflation. An investment carries upside and downside risk. The intention is for the money to grow fast than inflation. It is nuanced but I do think they are different.
 

rags747

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I agree with this. Savings is putting money away for the future with the expectation that it will be there when needed. It doesn't make or lose money. It tries to keep up with inflation. An investment carries upside and downside risk. The intention is for the money to grow fast than inflation. It is nuanced but I do think they are different.
Let me beat this dead horse some more! A savings account can most assuredly lose money over the long haul, just look at the past 10 years or so. Anyway, I believe we are all on the same page with this. Thx…
 

darthseinfeld

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Yeah, I suppose as you described it would be an investment.

I use the term more colloquially to mean the allocation of money toward something with the intent of making more money and with the implicit understanding that profit is not guaranteed and inherently risky.

Generally speaking, I think most people view a savings account as a safe place to keep their money rather than a money making venture.
I think savings can be viewed as an investment with total liquidity. I do view it as an investment since its still making money for me, not sitting there static. (Even though really fit the definition of "investment")I think of mine as a cash reserve. And now in the digital age its more accessible than 10-15 years ago. When I went to Europe I linked it with my Paypal and Cashapp (which I didnt before) as a safeguard in the event I lost my cards and got locked out of checking
 
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morasp

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I-series savings bonds are all you need. The only downside is you're limited to $10,000//yr electronically plus any tax refund in paper certificates.
 
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