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this comes up a lot, and I can never find the actual questions that get asked on these surveys. do they mean an actual savings account at a bank? the kind tha

this comes up a lot, and I can never find the actual questions that get asked on these surveys. do they mean an actual savings account at a bank? the kind that pay 0.02% interest? few people I know, even with high net worth and liquidity, have much of anything in a 'savings account'. But... "Only 41% of adults reported having enough in their savings account". Do they just mean 'savings'? Or liquid cash? I can never find the actual text of the questions asked, and any clarifications on this point, although I see pop media references to these sorts of surveys regularly

SketchySeaBeast 8y ago
They go on to mention that they'd have to put it on credit card, or ask friends, so while the article says savings account I don't think they are that literal. But you're right, it's a flaw in the language.
wgerard 8y ago
> few people I know, even with high net worth and liquidity, have much of anything in a 'savings account' Really? It's fairly common advice to store an emergency fund in something akin to a savings account (or at least something with FDIC backing). Either way, it seems bizarre for a high net worth individual not to have at least $500 in something extremely liquid like a checking/savings account. Either way, it's fair to assume it means liquid cash, since the question is basically "could you afford an unexpected $500 expense?". If you want to take that study to task, I think the far more interesting statistic is the 20% who would put it on their credit card: While those could be people who are just going into debt to afford the bill, it could also be people who just pay their card off in full every month and want whatever rewards they might be entitled to from using the credit card.
- ryandrake 8y ago
  > Really? It's fairly common advice to store an emergency fund in something akin to a savings account (or at least something with FDIC backing) That’s where I have my emergency fund (earning nearly zero interest of course). If OP knows of some other type of account with enough liquidity to use as an emergency fund AND generates significant interest, you have my full attention!
  - tbirdz 8y ago
    Check out online banks. My Ally Bank savings account offers 1.75% interest. Another option could be a CD ladder. Some banks, like Ally, also offer a "no penalty" CD, which has lower interest rates than a regular CD, but you can pull your money out at any time without paying a penalty, like you would on a regular CD.
  - lazide 8y ago
    allybank, capital one savings, personalsavings.americanexpress.com, and some others all offer >= 1% interest now. Some are >= 2% that I've run across. Still lower than inflation, but better than .001% Increased fed fund rates and tapering off QE has been having effects. Retail customers generally are unaware of this, so retail banks are still able to not pay any actual interest. A lot of the weirdness in the market (from Tesla to GE and others) is due to increased returns from 'safe' investments causing easy money for risky ventures to start to dry up. Expect failures as companies built on nearly free money start having to pay up or fold. Some will survive, many won't.
    - pmiller2 8y ago
      Which options over 2% APY do you know of?
      - lazide 8y ago
        Looks like I was wrong (the >= 2% were CDs) - Marcus.com (Goldman Sachs side bank) is currently offering 1.8% though, so not far off. https://www.marcus.com/us/en/savings/high-yield-savings https://www.marcus.com/us/en/savings/high-yield-savings
    - HillaryBriss 8y ago
      Some will survive, many won't. how precarious is it? any thoughts/guesstimates on the percentage that will fail because of higher rates?
      - lazide 8y ago
- mgkimsal 8y ago
  > in something extremely liquid like a checking/savings account. I was asking specifically if the surveys mean actual "savings" account, which often have some restrictions on them ("Make a total of 6 transfers and withdrawals each monthly statement cycle with no Withdrawal Limit Fee"). If you're getting a grand total of 0.01% interest, there's not much reason to also restrict activity as well. That said, I realize I do have a 'savings' account, via an online-only bank, getting about 50x what my local bank's savings account rate is. I just didn't think of it as a 'savings' account as I'm so accustomed to thinking of 'savings acct'='brick and mortar location'.
jandrewrogers 8y ago
Yes, they literally mean "savings account", which is an anachronism. Most people I know leave their money in a checking account instead, since the interest rates are comparable for all practical purposes (most people do not expend effort to chase twenty extra dollars in interest per year). Given that the median American household has $1000/month in discretionary income -- money they can spend on beer or savings -- it wouldn't make sense that 60% of Americans don't have $500 to cover an emergency. Unless it was defined as cash in a "savings account", which most people (myself included) don't use.
- mgkimsal 8y ago
  yeah, thanks. it's a weird old-fashioned thing, although, as I replied to someone else, I realized I do have a 'savings account', in one of those fancy new online banks, paying ~50x what my local brick and mortar pays. It's such a weird situation, because... if they even paid something like .7% or 1%, I wouldn't have bothered to move money out. Slowly, I will probably just stop using them when all new activity is done online, but I'm a child of B&M banks, and breaking the connection 100% is hard to do.

SketchySeaBeast 8y ago

They go on to mention that they'd have to put it on credit card, or ask friends, so while the article says savings account I don't think they are that literal. But you're right, it's a flaw in the language.

wgerard 8y ago

> few people I know, even with high net worth and liquidity, have much of anything in a 'savings account' Really? It's fairly common advice to store an emergency fund in something akin to a savings account (or at least something with FDIC backing). Either way, it seems bizarre for a high net worth individual not to have at least $500 in something extremely liquid like a checking/savings account. Either way, it's fair to assume it means liquid cash, since the question is basically "could you afford an unexpected $500 expense?". If you want to take that study to task, I think the far more interesting statistic is the 20% who would put it on their credit card: While those could be people who are just going into debt to afford the bill, it could also be people who just pay their card off in full every month and want whatever rewards they might be entitled to from using the credit card.

ryandrake 8y ago
> Really? It's fairly common advice to store an emergency fund in something akin to a savings account (or at least something with FDIC backing) That’s where I have my emergency fund (earning nearly zero interest of course). If OP knows of some other type of account with enough liquidity to use as an emergency fund AND generates significant interest, you have my full attention!
- tbirdz 8y ago
  Check out online banks. My Ally Bank savings account offers 1.75% interest. Another option could be a CD ladder. Some banks, like Ally, also offer a "no penalty" CD, which has lower interest rates than a regular CD, but you can pull your money out at any time without paying a penalty, like you would on a regular CD.
- lazide 8y ago
  allybank, capital one savings, personalsavings.americanexpress.com, and some others all offer >= 1% interest now. Some are >= 2% that I've run across. Still lower than inflation, but better than .001% Increased fed fund rates and tapering off QE has been having effects. Retail customers generally are unaware of this, so retail banks are still able to not pay any actual interest. A lot of the weirdness in the market (from Tesla to GE and others) is due to increased returns from 'safe' investments causing easy money for risky ventures to start to dry up. Expect failures as companies built on nearly free money start having to pay up or fold. Some will survive, many won't.
  - pmiller2 8y ago
    Which options over 2% APY do you know of?
    - lazide 8y ago
      Looks like I was wrong (the >= 2% were CDs) - Marcus.com (Goldman Sachs side bank) is currently offering 1.8% though, so not far off. https://www.marcus.com/us/en/savings/high-yield-savings https://www.marcus.com/us/en/savings/high-yield-savings
  - HillaryBriss 8y ago
    Some will survive, many won't. how precarious is it? any thoughts/guesstimates on the percentage that will fail because of higher rates?
    - lazide 8y ago
mgkimsal 8y ago
> in something extremely liquid like a checking/savings account. I was asking specifically if the surveys mean actual "savings" account, which often have some restrictions on them ("Make a total of 6 transfers and withdrawals each monthly statement cycle with no Withdrawal Limit Fee"). If you're getting a grand total of 0.01% interest, there's not much reason to also restrict activity as well. That said, I realize I do have a 'savings' account, via an online-only bank, getting about 50x what my local bank's savings account rate is. I just didn't think of it as a 'savings' account as I'm so accustomed to thinking of 'savings acct'='brick and mortar location'.

jandrewrogers 8y ago

Yes, they literally mean "savings account", which is an anachronism. Most people I know leave their money in a checking account instead, since the interest rates are comparable for all practical purposes (most people do not expend effort to chase twenty extra dollars in interest per year). Given that the median American household has $1000/month in discretionary income -- money they can spend on beer or savings -- it wouldn't make sense that 60% of Americans don't have $500 to cover an emergency. Unless it was defined as cash in a "savings account", which most people (myself included) don't use.

mgkimsal 8y ago
yeah, thanks. it's a weird old-fashioned thing, although, as I replied to someone else, I realized I do have a 'savings account', in one of those fancy new online banks, paying ~50x what my local brick and mortar pays. It's such a weird situation, because... if they even paid something like .7% or 1%, I wouldn't have bothered to move money out. Slowly, I will probably just stop using them when all new activity is done online, but I'm a child of B&M banks, and breaking the connection 100% is hard to do.