Comments on: Why Savings Accounts – And Why Not http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/ Simple, applicable personal finance advice for the modern world Fri, 10 Feb 2012 03:55:09 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Maryanne http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/comment-page-1/#comment-31133 Maryanne Sat, 02 Jun 2007 10:53:02 +0000 http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/#comment-31133 Regarding on-line savings accounts. It's not as liquid as I thought.I want to buy a car today, so last night, I easily transferred some $ out of my ING savings account back into my original bricks and mortar checking acct. Note comes up that funds take 2-3 business days to actually transfer. Oh great - what do I do today? Then, I went to my HSBC account to do the same thing -transfer money out of that account back into the original checking used to open the HSBC account. Well, it's even less flexible than ING. For me to do that, HSBC requested my ID name AND password for my bricks and mortar acct!!!! I thought banks would never ask you for that info but that's what HSBC insists on. That is ridiculous - I already opened the account using my checking account which you spent days verifying with the small amount deposits. Why do I have to do that all over again or give you all of my most personal info to my checking account!Geesh! Again, ING is the more flexible of the 2 accounts. Learn from my bad experience - online savings account are for savings only - it's very difficult to withdraw $ Regarding on-line savings accounts. It’s not as liquid as I thought.I want to buy a car today, so last night, I easily transferred some $ out of my ING savings account back into my original bricks and mortar checking acct. Note comes up that funds take 2-3 business days to actually transfer. Oh great – what do I do today? Then, I went to my HSBC account to do the same thing -transfer money out of that account back into the original checking used to open the HSBC account. Well, it’s even less flexible than ING. For me to do that, HSBC requested my ID name AND password for my bricks and mortar acct!!!! I thought banks would never ask you for that info but that’s what HSBC insists on. That is ridiculous – I already opened the account using my checking account which you spent days verifying with the small amount deposits. Why do I have to do that all over again or give you all of my most personal info to my checking account!Geesh! Again, ING is the more flexible of the 2 accounts. Learn from my bad experience – online savings account are for savings only – it’s very difficult to withdraw $

]]> By: Ted Valentine http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/comment-page-1/#comment-27826 Ted Valentine Tue, 22 May 2007 14:35:06 +0000 http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/#comment-27826 Rick - All said is it was incomplete --- and potentially misleading. You add a perspective that wasn't in the post. You seem to agree. Trent - I read the last sentence carefully the first time and again just now. I still think its incomplete and potentially misleading advice. Rick – All said is it was incomplete — and potentially misleading. You add a perspective that wasn’t in the post. You seem to agree.

Trent – I read the last sentence carefully the first time and again just now. I still think its incomplete and potentially misleading advice.

]]> By: Lazy Man and Money http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/comment-page-1/#comment-27682 Lazy Man and Money Mon, 21 May 2007 21:38:17 +0000 http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/#comment-27682 Your example of how things double gets even more exaggerated when inflation is factored in. At 3% inflation that savings account only makes 2% meaning that it would 36 years to double in terms of real spendable money. However, in the Vanguard S&P 500 at 9% after inflation, it doubles in 8 years, about 4.5 times quicker. Your example of how things double gets even more exaggerated when inflation is factored in. At 3% inflation that savings account only makes 2% meaning that it would 36 years to double in terms of real spendable money. However, in the Vanguard S&P 500 at 9% after inflation, it doubles in 8 years, about 4.5 times quicker.

]]> By: Trent http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/comment-page-1/#comment-27672 Trent Mon, 21 May 2007 20:43:29 +0000 http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/#comment-27672 Ted, read the last sentence of the article again. Carefully. Ted, read the last sentence of the article again. Carefully.

]]> By: Rick http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/comment-page-1/#comment-27671 Rick Mon, 21 May 2007 20:40:12 +0000 http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/#comment-27671 Ted Valentine: I don't see anywhere where Trent said this is all the financial advice you'll ever need. This post, as well as all his posts, constitute just one piece of the puzzle. He states, "they are great places to store emergency funds, which is a fundamental part of any personal finance strategy." Note the part "fundamental part". Further, there are quite valid reasons why one may not wish to put all his money in retirement accounts. What if he wishes to retire early, but his retirement accounts are locked (or at least, access to them incurs a penalty)? What if he is saving for a vacation in five years? What if he's saving for a new car? A boat? Good luck using your retirement account for any of these activities. Ted Valentine: I don’t see anywhere where Trent said this is all the financial advice you’ll ever need. This post, as well as all his posts, constitute just one piece of the puzzle. He states, “they are great places to store emergency funds, which is a fundamental part of any personal finance strategy.” Note the part “fundamental part”.

Further, there are quite valid reasons why one may not wish to put all his money in retirement accounts. What if he wishes to retire early, but his retirement accounts are locked (or at least, access to them incurs a penalty)? What if he is saving for a vacation in five years? What if he’s saving for a new car? A boat? Good luck using your retirement account for any of these activities.

]]> By: Dy (www.dyphan.com) http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/comment-page-1/#comment-27668 Dy (www.dyphan.com) Mon, 21 May 2007 20:19:25 +0000 http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/#comment-27668 I never understood why some people recommend a money market account over a checking account. From what I gather, they seem to have almost the same return, if you find a decent online savings account. I never understood why some people recommend a money market account over a checking account. From what I gather, they seem to have almost the same return, if you find a decent online savings account.

]]> By: John http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/comment-page-1/#comment-27666 John Mon, 21 May 2007 20:07:17 +0000 http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/#comment-27666 FDIC Insurance is not the perfect solution we all rely on it. If I remember correctly they have 20 years to pay back that 100,000$ (with no penalty or interest during that time) and the reality is that if HSBC or Bank of America etc failed and the FDIC had to step in serious problems would exist in the economy and the Fed's ability to pay out would be highly suspect. FDIC Insurance is not the perfect solution we all rely on it. If I remember correctly they have 20 years to pay back that 100,000$ (with no penalty or interest during that time) and the reality is that if HSBC or Bank of America etc failed and the FDIC had to step in serious problems would exist in the economy and the Fed’s ability to pay out would be highly suspect.

]]> By: Ted Valentine http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/comment-page-1/#comment-27660 Ted Valentine Mon, 21 May 2007 19:29:01 +0000 http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/#comment-27660 This post is sorely incomplete financial advice. Assuming you're out of debt except your 1st mortgage, you should maximize all of your pre-tax savings (401k) and fully fund a Roth IRA before dabbling with non-retirement mutual funds. Many would even say that paying off your mortgage early would be the better investment. Compare a guaranteed 6% rate of return on paying the mortgage off to a risk- and tax-adjusted rate of return on the S&P 500 and you're looking about dead even. This post is sorely incomplete financial advice. Assuming you’re out of debt except your 1st mortgage, you should maximize all of your pre-tax savings (401k) and fully fund a Roth IRA before dabbling with non-retirement mutual funds.

Many would even say that paying off your mortgage early would be the better investment. Compare a guaranteed 6% rate of return on paying the mortgage off to a risk- and tax-adjusted rate of return on the S&P 500 and you’re looking about dead even.

]]> By: Tkriger http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/comment-page-1/#comment-27647 Tkriger Mon, 21 May 2007 18:49:08 +0000 http://www.thesimpledollar.com/2007/05/21/why-savings-accounts-and-why-not/#comment-27647 Good advice... I just recently passed $1,000 in my E-Fund, and am now planning on paying down the ~15,000 in student, credit and car loan debt I have. I am still planning on putting about $100 a month to grow the E-Fund eventually to 3 months worth, but for now its not a priority...I can't wait till I have enough in there to start investing in non-retirement accounts. Good advice…

I just recently passed $1,000 in my E-Fund, and am now planning on paying down the ~15,000 in student, credit and car loan debt I have. I am still planning on putting about $100 a month to grow the E-Fund eventually to 3 months worth, but for now its not a priority…I can’t wait till I have enough in there to start investing in non-retirement accounts.

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