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My "high interest" savings accounts already took a recent haircut and this will accelerate that. I understand that's the idea: make investing attractive and sav

My "high interest" savings accounts already took a recent haircut and this will accelerate that. I understand that's the idea: make investing attractive and savings unattractive. But for a regular joe like me, this is exactly the time I want to be saving more so it stings.

jkraker 7y ago
I moved some of my high yield savings account into a 12 month CD recently to maintain a more tolerable interest rate for the next 12 months while the savings account interest rate inevitably tanks. That means I can't touch it for 12 months if I want the interest, but I was careful with the amount I put in the CD so that I will most likely not have to touch it. This should in no way be construed to be advice because I'm unqualified to give it. It's just an option.
- lbotos 7y ago
  you can also get 4-5 smaller CDs (whatever smaller means for you) so if you did need some funds, you wouldn't have to lose all of the interest.
- jader201 7y ago
  Some banks have “no penalty” CDs that allow you to close them in the event that you need the money without taking a hit on any accrued interest. And this can happen as early as 7 days after opening the account. So the risk is very low. They’re slightly less yield than regular CDs, but not much. A really good option during this time. My bank actually sent an email prior to the last interest rate drop, and I moved most of my savings (that I didn’t think I’d need to touch for a year) into an 11-month CD before the rates dropped.
perl4ever 7y ago
What do you think is the difference between saving and investing??
- nightski 7y ago
  Saving is preservation of capital whereas investing is growing capital. At least that is my take.
  - jfk13 7y ago
    Saving is normally expected to be minimal-risk preservation of capital, whereas investing risks capital loss (alongside hoping for capital gain).
    - perl4ever 7y ago
      Yeah, a person could distinguish them this way, but you're using the passive voice. Who habitually uses the words in this manner consistently, in what contexts?
  - perl4ever 7y ago
    Ok, but parent is lamenting that "saving" pays less than "investing". You're saying that's implied by the (or your) definition so it seems like it would go without saying.
    - wffurr 7y ago
      It's not that saving pays less than investing; it's that it's paying almost nothing right now. Savings account interest rates are terrible, which is very frustrating if you want to have some cash reserves. I'm not going to put my 6 month emergency fund or the downpayment for my future house into stocks and ETFs; they're too risky. It hurts to keep it in a savings account paying less than 1% though, which is the alternative.
    - tree3 7y ago
      > "saving" pays less than "investing" It does, except for when cash performs better than equities (like during a bear market).
- battery_cowboy 7y ago
auntienomen 7y ago
This may well be a good time to buy low. Take the interest rate hit for a few months and be happy you have cash on hand when opportunity knocks.
WC3w6pXxgGd 7y ago
Savings become investments. When you "save" money in a bank, the bank uses that money to create loans.

jkraker 7y ago

I moved some of my high yield savings account into a 12 month CD recently to maintain a more tolerable interest rate for the next 12 months while the savings account interest rate inevitably tanks. That means I can't touch it for 12 months if I want the interest, but I was careful with the amount I put in the CD so that I will most likely not have to touch it. This should in no way be construed to be advice because I'm unqualified to give it. It's just an option.

lbotos 7y ago
you can also get 4-5 smaller CDs (whatever smaller means for you) so if you did need some funds, you wouldn't have to lose all of the interest.
jader201 7y ago
Some banks have “no penalty” CDs that allow you to close them in the event that you need the money without taking a hit on any accrued interest. And this can happen as early as 7 days after opening the account. So the risk is very low. They’re slightly less yield than regular CDs, but not much. A really good option during this time. My bank actually sent an email prior to the last interest rate drop, and I moved most of my savings (that I didn’t think I’d need to touch for a year) into an 11-month CD before the rates dropped.

perl4ever 7y ago

What do you think is the difference between saving and investing??

nightski 7y ago
Saving is preservation of capital whereas investing is growing capital. At least that is my take.
- jfk13 7y ago
  Saving is normally expected to be minimal-risk preservation of capital, whereas investing risks capital loss (alongside hoping for capital gain).
  - perl4ever 7y ago
    Yeah, a person could distinguish them this way, but you're using the passive voice. Who habitually uses the words in this manner consistently, in what contexts?
- perl4ever 7y ago
  Ok, but parent is lamenting that "saving" pays less than "investing". You're saying that's implied by the (or your) definition so it seems like it would go without saying.
  - wffurr 7y ago
    It's not that saving pays less than investing; it's that it's paying almost nothing right now. Savings account interest rates are terrible, which is very frustrating if you want to have some cash reserves. I'm not going to put my 6 month emergency fund or the downpayment for my future house into stocks and ETFs; they're too risky. It hurts to keep it in a savings account paying less than 1% though, which is the alternative.
  - tree3 7y ago
    > "saving" pays less than "investing" It does, except for when cash performs better than equities (like during a bear market).
battery_cowboy 7y ago

auntienomen 7y ago

This may well be a good time to buy low. Take the interest rate hit for a few months and be happy you have cash on hand when opportunity knocks.

WC3w6pXxgGd 7y ago

Savings become investments. When you "save" money in a bank, the bank uses that money to create loans.