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Well, why would you keep any money over 1k in a savings/checking account? Savings accounts nowadays don’t serve any purpose (you definately shouldn’t be saving
by mruts 8y ago
Well, why would you keep any money over 1k in a savings/checking account?
Savings accounts nowadays don’t serve any purpose (you definately shouldn’t be saving money in them) besides being FDIC insured. Checking accounts should only hold temporary money in order to finance short-term liquidity constraints (paying off credit cards, etc).
All extra money should be put in a brokerage account: risk-free treasuries, money markets, equities, etc.
But maybe average people don’t have any extra money at all? Or maybe they use savings accounts? I don’t know, but either is sad and irrational.
- perl4ever 8y agoSavings accounts seem pretty useless, only because the interest rates are currently ridiculously low. My credit union currently pays 0.3%. But here's an interesting question: since the Fed pays banks 2.4% interest on excess reserves, why can't someone start a "bank" that simply takes depositors' cash and passes through the interest from the Fed from reserving it all? The answer, I believe, is that while people have been/are trying, the Fed doesn't want that - the interest is supposed to subsidize conventional banks and not be given away to the general public.