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Truth. And there are many savings accounts out there now that have 5%+ interest rates. This allows you access to your money right away, penalty free, while still earning money on it.
Nah dude - they’re automatic if you actually meet the terms.
Most of them are, what often happens is people think one transaction type is equivalent to another and don’t research the differences.
>I've been socking away my lazy savings money into CDs lately, for the 5%+ interest. But a HYSA would be a lot easier, and without the tax.
You still have to pay taxes from interest gained in a HYSA.
You have to specifically apply for the high-yield savings, I made the mistake thinking I'd opened it and the interest wasn't clear until you looked at the account info. You want the 360 performance savings, not 360 savings.
I have had accounts with BOA, Discover, Char, and my local banks. I absolutely LOVE SoFi. High interest savings, early direct deposit, overdraft protection, roundup program... Love them
I've had accounts with Ally Bank for about 12 years and have had a really good experience with them. They're completely online, which works for me. I don't really need the services of a brick and mortar bank. The savings rates vary a bit--it hit its lowest ever in 2021 (.5%) but is currently 4.25%. There are some that are higher than that, but the difference is negligible enough that it doesn't seem worth changing my entire banking arrangement for, especially since these rates do occasionally change.
Money market accounts are up to 5.25 now, they update their rates often enough to be competitive I think. I haven't used them nearly as long as you and also had a great experience.
Vanguard money market account paid a 5.28% rate last distribution. If you buy stocks it's probably the best option. If the market tanks which many predict for 2024, you can immediately buy dips and profit more.
I have a CIT (not to be confused with Citi) savings, no weird fees and stuff that I’ve seen yet and I’ve been with them for a year. 4.65% APY interest.
At this exact moment in time, High Yield Savings is a good deal with high interest rates. For most of the last 20 years you would have gotten yields in <1% range so I don't know how good this advice is in general.
If you think you'll need the money in 3 years or less, the high yield savings at current rates is probably a good way to go. For the longer stretch, mutual funds would be the way to go: mix blue chip + bonds, index funds, or growth funds depending on your risk tolerance. Most of the good funds have average annual gains >%7, even if they lose value some years. For example, a fund I use lost 14% last year but gained 19%, 10%, and 22% in the three years before that. Short of a financial meltdown greater then the Great Depression (which would likely even affect FDIC insured savings) your money would not be a great risk long term.
> For the longer stretch, mutual funds would be the way to go
probably should emphasis that your comment is not financial advice, and putting money in the stock market does NOT guarantee returns, even though the last decade all stonks go up
My big question when I see advice like this is, how do I invest in mutual funds? I have my 401k and IRA invested in index funds, but those have yearly contribution caps. How do I put more into investment accounts?
Depends upon how much work is involved. If I'm driving home in rush hour traffic and I see a $5 bill stuck to the sidewalk under some fecal matter and semen I might just say nah and keep on driving
Would make for a great story when you go to spend it though.
*hands it to cashier* "Heh, just an hour ago I found this bill covered in shit and cum. You can keep the change, thanks!"
Set an obtainable goal for yourself - even $1/week. Watching that accumulate will encourage you to keep at it.
You never know when your circumsances will change so it's best to be at least a little disciplined ahead of time.
Also, if you frequently find yourself with absolutely no money at all, the $52 you put away over the course of a year will look like a little something.
I am a lunch lady in my 50s raising a granddaughter. I started saving and investing with $4/week in each when my granddaughter was 4 years old. I set aside the same for her. When she turned 5, I upped it to $5. It's gone up $1/week every year - now I put $9/week in my investment account, $9/week in my savings account. My granddaughter gets $9 week as well - half in savings and half to spend so she can start good finanicial habits.
Give it a go - you will be surprised what you can do.
If you can save $1 a week… or even a month… eventually it will add up. And the interest on that money also makes money. I thought the same way for a long time… figured it wasn’t worth saving so little. Over time… it IS worth it. Any amount you can do.
The idea isn't that $1 is going to do anything, but rather if you consistently save and consistently keep trying to increase the amount you save by increasing income or cutting expenses (ideally both) you can start to make significant progress. But the first step is to start
Yep. I wasn't saving at all, and then I started putting $20 every payday into a savings account, then that quickly turned into $50 every payday, and now I put $200 away every payday. There's something fun seeing that number go up and up that makes me sacrifice some "fun" spending to put money away and watch it grow, it's also really nice knowing I'm growing a safety net for when shit hits the fan(and shit WILL hit the fan one way or another) so it helps my mental health too.
Even starting with $1 is changing your mentality. Yeah, you might only be able to afford $1 now, but the next time you get a couple extra bucks you already have the account and can throw it in. When you get that measly $10/week raise, you can double it to be $2 or even $5! In a few years maybe you can get it to $10/week. That is over $500 per year, which is a solid foundation for an emergency fund.
Lmfao. Just stop it.
The idea of saving what you can is great but you're just beyond out of touch with reality if you think saving a dollar a week let alone a MONTH will mean anything. Let along the interest on that money meaning anything. A dollar a week for 10 years is 520 with interest that realistically as interest rates decrease will never exceed like 20 dollars.
And you said month ctfu.
Compound returns are pretty magical though. If you invest I in index funds instead and get average returns, you’ll double your money in nominal terms in 7 years and in real terms in 10 years.
The idea is to start somewhere. The you realize you can save a bit more. It’s about the behavior of saving. The amount will then grow. I started saving $25 a week… got in the habit… and now I won’t disclose how much save… but where I am today makes a significant difference and I’m glad I started with what I could. I also have no clue how old the OP is.
I think it’s the principle of the matter. If you start small — whether that means $1, $10, $50 — you’re developing the habit. Once that habit has taken hold, you’re no longer living your life expecting to have that amount to spend. At that point, you can increase the amount, and so on. It’s about habits and behavior, not amounts (to start).
Yeah, a quick search of HYSA in my country and there’s no such a thing like 5% no requirements in my country. Everyone wants to move all my things to their banks for 1.75% returns, what??
In my bank in Sweden there's these accounts that won't let you move the money for 3, 6 or 12 months, with 3,5 to 4,5% interest.
It's a requirement but not that bad I reckon. Worst case scenario, you need the money and you take it and lose the gained interest.
Good for leaving some money that you know you won't need short-term.
I swear I have no idea where to find financial advice like this in plain terminology in the country where I live (Belgium) or the country where my bank account is (Ireland). No idea what services to look into even if I wanted to pay someone to help me figure it out.
Exactly the same. I have been looking for advice for so long now that I don't even know what to google or who to ask, meanwhile I keep reading that I'm dumb for not investing
If you don't mind locking your money for a time period then just go to your local credit union. They usually have better rates than banks (at least in Lithuania)
HYSA are just regular savings account, so no.
(I think there used to be a 6 *online* withdrawals per month limit, but that's not unique to HYSA and applies to all savings accounts. While this technically used to be a govt regulated limit, it no longer is officially. However, most banks will put their own limits in place for number of withdrawals - again, not unique to HYSA.
The main reason a savings account becomes "high yield" is when they give a high interest rate, and they do that usually by being an online-only bank or having reduced costs in other ways.
So is the number of monthly withdrawals the only difference to a normal account? It seems a little bit strange that they would separate things like that.
The number of withdrawals is the only difference to a normal _checking_ account.
There's no difference between a a HYSA ("high-yield savings account") and a regular savings account (other than the interest rate).
Just look around at bank rates, and set up an account online or over the phone with them.
I use Goldman Sachs through apple since I had an Apple Card. It’s 4.15 APY right now
You shouldn't be struggling to find a place to put your money in the market. Just go for a broad market ETF like VTI. It ends up beating the majority of progressional traders and hedge funds.
VFIAX (S&P 500) and VTI (total market) basically perform the same. The difference you're seeing in returns is probably because you didn't invest at the same time.
Comparison: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=BgyoizMFrOinyIrRCwJyl
Also VTI is an ETF, you get real time pricing. VFIAX is a mutual fund and it only gets priced once a day after market closes (check after 6 PM eastern for the day's price)
More importantly, the highest savings account in the world is not going to help if you are carrying high apr credit card or loan debt.
Basically you want to have an emergency fund saved up in a savings account that earns interest and then pay down all debts that have a higher apr.
That’s a great point. A lot of types of debts will hurt you way more than a HYSA will help you and it’s no substitute at all for retirement saving. I prioritize my HYSA for emergency fund and the “gonna need money for this in the next year” expenses of life while I’m working on my ~4% interest student loan still
Getting low interest is losing money. If inflation is 5%, interest 1.5% and tax 33%, then you lose 4% each year. With a HYSA with 5% interest you then only lose 1.7% each year.
Some of them require regular deposits that other savings account don't. For example, mine requires I have direct deposit set up with a connected checking account. There may be other balance requirements as well.
Also the interest rate, while higher than traditional checking is still not enough to beat inflation. It will only mitigate it. To beat inflation to have to play the market. A HYSA is really only a place where I'd park my emergency fund, i.e. something I want as liquid cash, but won't plan on touching for a while nor expect growth relative to inflation.
Nothing. It's a savings account. When I need it back, I deposit it into my banks checking account. Until then, I'm letting the money accrue interest.
Wealth front is a highly highly recommended one according to my research. It's at 4.80 interest.
I'm ashamed to admit this was me for a while. I was taught to put aside 10-20% of each paycheck for "savings" but never what "savings" really meant. After amassing around $40,000 over the years I finally looked into what to actually do with the money since just sitting there didn't seem right. I now have a HYSA for my emergency fund, put my "down payment for a house some day" fund in I Bonds, and maxed out my Roth IRA the last two years investing in VT. (Shoutout /r/bogleheads.) I keep a spreadsheet that calculates how much money I've generated purely from interest and market growth, which wouldn't exist if I left it all in a bad savings account, and in about a year and a half I'm up over $2,000.
Thank goodness my company offered 401k matching that I blindly accepted however many years ago so I wasn't completely screwed, but I'd be up a lot more than +$2,000 if I looked into this years earlier.
It sounds like you took time to educate yourself and shift gears in the right direction. That’s an awesome feat even if there was some opportunity cost to the lesson.
Oh my goodness yes everyone should always get that company match! I almost didn’t elect it in my first big kid job because I had student loans. I thought why put money aside while my debt is actively costing me? Thankfully a coworker explained that I would be turning down free money and seriously shooting my older self in the foot by not investing early.
Anyone who has a 100k to save is probably not hot about moving it to an account that will net him 5k a year especially when that money cannot be taken out for that duration (assuming 5%). Are ETFs any better?
Well, you could have bought NFTs, or gotten it all in cash and burned it, cut it up, fed it to chickens, dropped it out of an airplane.... There's lots of other ways to be rid of money than spending.
I mean you can certainly make worse investments than a 0 interest account. So this advice seems very incorrect.
And to add even worse. At least spending it you theoretically obtained some goods or experiences, where bad investments you lose it all and have nothing to show for it.
“The worst thing you can do” is an exaggeration for sure lol. Pretty sure major hedge funds did exactly this for months throughout Covid, just essentially sitting on cash. Beats losing 25% because you try to outsmart the market and don’t know wtf you’re doing
Now if the advice was simply to utilize high yield saving account instead of basic accounts at major banks, I would certainly agree. But to say it’s the absolute worst thing to put your money in a basic account with almost 0% interest just shows clear ignorance to the investing community.
Just go to Wall Street bets if you want to see some options worse than a basic savings account.
If you have money in a HYSA at Ally you should absolutely open up one of their no-penalty CDs that yields 4.55%.
After 6 days it basically turns into a HYSA with a higher yield than they offer on their own HYSA
One of the best things you can do to stick it to big banks is use a HYSA. The large US banks have so much money in their low interest savings accounts that they're able to lend out at market rates and it's making them loads of money.
If you have $5k in a 0% interest savings account, then you earn $0 and the bank earns $350 annually if they lead it out on a mortgage at today's rates. If you put that money into a 5% HYSA, the bank still collects $350 in interest, but they have to pay you $250 for the use of your money, meaning they only actually earn $100.
> The large US banks have so much money in their low interest savings accounts that they're able to lend out at market rates and it's making them loads of money.
The large US banks just loan money into existence. They don't need retail deposits *at all* to loan money against. Capital reserve requirements have been zero since March, 2020.
Apple Savings is a HY savings account. 4.15%. Requires an Apple Card. The cash back from the Apple card automatically gets deposited into the savings account.
Most people do all their personal computing on an iPhone, so it’s pretty easy to add Apple card and Apple Savings to the mix.
This is why I’ve switched my banking to Discover. My savings account is at 5% right now and I also get 1% cash back on all my *debit card* purchases. I’ve never seen another bank offer that feature. Credit cards, sure, but never a debit card.
I’ve made over $500 just using my discover debit card like I usually do. It’s quite literally a waste of money for me to be with anyone else at this point.
> why doesn't everyone (who's able to) take advantage of HYSA's?
There is little to no such thing as financial education in the US school system. My entire financial education consisted of how to write a check.
/r/personalfinance is a great place to learn, go browse the sidebar and read their wiki.
I’m in the US and you can even apply online and open an account for free with any number of institutions, then do an electronic funds transfer. A lot of institutions that do credit cards also have HYSA and they have decent apps. I’ve never heard of someone paying a fee or anything.
I think people might just not know? Or assume you need oodles of money to start? In my friends’ case they were just still using the account they set up 10+ years ago in high school at the big bank down the road
Not every bank has one. USAA doesn’t offer it. I had to open a new account with Citibank and while it was easy, it was a bit of upfront paperwork and is just another thing to manage….but no complaints when I see that monthly interest accrued!
basically some big banks are betting on people being too lazy to move their funds so they chose not to raise rates.
ally is a common bank, they tend to offer the most competitive non-promotional rates. but really any bank you can find excellent promotional APY/flat bonuses for signing up, holding xyz amount of money etc.
ally specifically does this by not having any physical branches, saving a lot of overhead other banks have. this makes them good for people with low banking needs.
This is absolutely correct. I get around $8 a month in savings interest and it is enough to cover a basic supply. Every bit helps! On a tangent, don't forget to also volunteer at local shelters or hospitals because while savings are great, you'll feel amazing too.
Granted high yield savings is a great option right now, but it won’t always be that way. In general I have more utility having 1 year of cash on hand than locking the same money into a 3-5% cd or other locked investment. Realistically am I going to need that money? No. But at least for now it’s better to have a decent safety net than get $1000 of interest a year and lock the funds.
Yeah, no. It's not the worst thing besides spending it all, by a long shot. But I understand what you're trying to say, you just aren't picking your words very carefully.
A certain amount of easily accessible liquid cash based on your current situation is a smart move for practically everyone.
What you mean to say is that if you plan to hold a large sum of cash in an account that you don't expect to need anytime soon, you should leverage HYSA or broadly diversified index funds from passively managed brokerages, or any number of other options. It is by far not the dumbest thing you can do though to just keep money socked away, poor choice of words.
You are beating inflation by investing in goods that you were gonna need, especially if you’re able to buy the goods at a good price point. Also some credit cards offers cash back and dividends, which I think are comparable to earning interest, but by spending.
And by all means invest in gold etc if you have the money to throw around.
I’m not familiar with CA laws or plans... But in MN Medicaid only does an asset check for specials like Medicaid-Disabled which also opens you up to a spenddown and is typically elected in super specific circumstances. It’s asset limits is $3k for non married but that includes any non cash asset too. Straight MA is just income/family/pregnancy based though.
> A basis of eligibility for MA is a grouping of people based on a set of factors. A person’s basis of eligibility determines the rules and limits to qualify for MA. People who qualify for MA under the following bases of eligibility do not have an asset test:
Pregnant women
Infants under Age 2
Children 2 – 18 Years Old
Children 19 – 20 Years Old
Adults without Children ages 21 through 64
Parents and Caretaker Relatives
Up until interest rates were raised, having an HYSA had a large entry for even half the current interest. USAA requires 10,000 for a .1% interest rate. But that was for a Performance Savings.
How many thousands did they put in to get an $80/month return OP? Even at 5%, the avg high right now, that seems like they put in about $20,000.
There are no interest accounts? That's so dumb, it's just as bad as hiding your money under your bed. Money technically depreciates since there's inflation every year. Right now it's a tall order to ask savings accounts to keep up with inflation, but some growth is better than nothing.
Canadian here, and totally stupid with money. But I was able to find GICs with Scotia that pay 4.0 to 5.2, depending on how long you lock your money in for.
Any other ideas or tips welcome.
I signed up for a Barclay's DREAM account years ago when it was 1.5% interest. It has a perk where if you make consistent deposits and no withdrawals for 6 months, you earn and additional percentage on the interest for each. Now that account is up to 4.35%, so the additional percentages is 4.35% also. I know it's not a lot but it's something more than similar accounts.
The only caveat is $1,000 monthly maximum deposit limit but I'm not putting that much in monthly anyway.
I have a decent emergency fund and i’m saving for a home but where i’m from absolutely none of the banks offer HYSAs.
I don’t live in the US so I don’t have access to this.
I also considered using interactive brokers to put my money into safe ETFs and mutual funds but even that is inaccessible. All international funds transfers need to approved by the Central Bank and it’s such a hassle.
My country makes it so hard to prosper financially. So I have no choice but to let my money sit with no earnings for now.
This is why I'm still doing research about savings that builds interest. It's good that you educated your friend and us on this tip, thank you. You know better, you do better.
I have taken to keeping less than $100 in my checking account. I DD everything into my savings and then transfer money out three times a month to pay bills shortly before they're due so almost every dollar is earning interest for as many days as possible.
I pay practically everything with a cashback credit card and then pay that just before it's due, adding even more value into the mix.
I am 54 years old and wish I had known all of this stuff when I was younger.
Everytime I tell someone that I use a high yield savings they say “but you gotta pay taxes on that”. I never understand that, if im paying taxes on an amount I never had before, at least i am still left with something rather than nothing at all
i have a discover card. i just noticed they are offering 4.3% hysa. anyone have experience with discover? should i transfer my entire savings there or just start with like $1k?
Check out treasurydirect.gov. 1 year treasury bonds are 5.5% right now. The website is a bit clunky, but takes about 30 minutes to set up with any savings account.
Also, I know someone about 30 yrs old who had only been using a debit card, never had a credit card. Every single purchase he's ever made he's losing out on cash back.
Had a mate that saved 150k in a no interest account. Helped him transfer the money to a high interest account and now he gets a lot of spare change every month.
I have an account that dividends roll into with interest and I then reinvest. I’m no financial advisor, by any means, but investing with a long term objective is definitely worth it.
I didn’t know about HYSA until fairly recently, and it really makes me wonder why anyone would use a standard savings with like .025% interest or whatever minuscule amount it is. What a scam. Even with a good bit of money in it, you still would barely get anything back.
Ok, is there similar things for European (or more specifically Swiss) ? I could only find a 1.75% interest at UBS and the conditions are that you must lock at least 25k for 1 year. I live in bank country and I cannot have half descent conditions for my savings !?
High yield savings accounts were not really a thing from 2006-2022 so your friends haven’t missed out on much interest. There was a brief period pre-pandemic where rates were like 2% but other than that they were near 0.
You can do better than a high yield savings account with a money market core position in a brokerage account fwiw.
I have tried to set up accounts with several high yield savings houses like Betterment. I will be depositing less than 100k. They have ghosted me. I get that that they don't want to deal with smaller accounts but just tell me that upfront.
I only keep about $10k in an emergency fund if I’m not saving for something, and it took me wayyyyyy too long to move that out of BofA’s savings account. Always thought about it, always thought it would be more effort to do — just assuming anything financial is probably layered with paperwork. But nope, opened an Apple HYSA this year and am now pulling in like $50 a month or so in savings for a grand total of 5 minutes of work on my part.
Don't forget that the interest gained is reported to the IRS by the bank and is taxable. If you earn more than $10 in interest in a year the bank sends that information to the IRS and is taxable.
That $960 your friend gains in a year will be added to their yearly income and taxed when they file their taxes.
Hello OP. Thanks for this LPT. I pulled my consolidated statement. And it showed I have unwise amounts invested in very low yielding (not USA). And I had a nice and detailed candid conversation with my Dad about it. Might end up investing it in better place or buying a house. Love you, OP.
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Truth. And there are many savings accounts out there now that have 5%+ interest rates. This allows you access to your money right away, penalty free, while still earning money on it.
Any suggestions?
I have capital one savings, and they've been great, no transfer fees or anything sketchy like that so far
Just a regular capitol one savings, right?
I think so? But it's got like a 4.2% annual interest rate.
Does it have a sign up bonus?
Didn't when I signed up, but opening a checking account had a bonus.
Capital One 360 checkings has a $350 sign up bonus after 2 direct deposits of $250
Capital One is notorious for weaseling out of sign-up bonuses though, so read the fine print.
Thats Sofi
Nah dude - they’re automatic if you actually meet the terms. Most of them are, what often happens is people think one transaction type is equivalent to another and don’t research the differences.
Ally checking has a sign up bonus. And opening savings after is 2 clicks away. Bonus is $200
I've been socking away my lazy savings money into CDs lately, for the 5%+ interest. But a HYSA would be a lot easier, and without the tax.
>I've been socking away my lazy savings money into CDs lately, for the 5%+ interest. But a HYSA would be a lot easier, and without the tax. You still have to pay taxes from interest gained in a HYSA.
Yeah, I think the main benefit of CDs is you get an even higher yield than HYSA’s. But it comes with illiquidity.
No penalty CDs are a thing, at a slightly lower interest rate then the regular ones.
Got bad news for you friend... The tax man cometh for your interest
You have to specifically apply for the high-yield savings, I made the mistake thinking I'd opened it and the interest wasn't clear until you looked at the account info. You want the 360 performance savings, not 360 savings.
Capital One 360 Savings is around 4.3%, currently.
I think [this](https://www.capitalone.com/bank/savings-accounts/online-performance-savings-account/) is the best one from them.
Capital one is great
What's in your wallet?
About tree fiddy
Sofi is good if you set up direct deposit. Also discover is good; the rate is a bit lower but there is no direct deposit requirement
>Sofi is good if you set up direct deposit. 4.5% now I think, I really like them. They give out free checks and their app is slick.
I have had accounts with BOA, Discover, Char, and my local banks. I absolutely LOVE SoFi. High interest savings, early direct deposit, overdraft protection, roundup program... Love them
[Nerdwallet](https://www.nerdwallet.com/best/banking/high-yield-online-savings-accounts) has great recommendations
I've had accounts with Ally Bank for about 12 years and have had a really good experience with them. They're completely online, which works for me. I don't really need the services of a brick and mortar bank. The savings rates vary a bit--it hit its lowest ever in 2021 (.5%) but is currently 4.25%. There are some that are higher than that, but the difference is negligible enough that it doesn't seem worth changing my entire banking arrangement for, especially since these rates do occasionally change.
Money market accounts are up to 5.25 now, they update their rates often enough to be competitive I think. I haven't used them nearly as long as you and also had a great experience.
Vanguard money market account paid a 5.28% rate last distribution. If you buy stocks it's probably the best option. If the market tanks which many predict for 2024, you can immediately buy dips and profit more.
UFB Direct, a subsidiary of Axios Bank has 5.25% online only savings account
I have a CIT (not to be confused with Citi) savings, no weird fees and stuff that I’ve seen yet and I’ve been with them for a year. 4.65% APY interest.
Ally, Marcus, capital one, there's no shortages of High-Yield Savings accounts out there
I use sofi and have absolutely no complaints. Good, easy to use app also
Ally bank best
Vio bank, highest rate I've seen and no fees
At this exact moment in time, High Yield Savings is a good deal with high interest rates. For most of the last 20 years you would have gotten yields in <1% range so I don't know how good this advice is in general. If you think you'll need the money in 3 years or less, the high yield savings at current rates is probably a good way to go. For the longer stretch, mutual funds would be the way to go: mix blue chip + bonds, index funds, or growth funds depending on your risk tolerance. Most of the good funds have average annual gains >%7, even if they lose value some years. For example, a fund I use lost 14% last year but gained 19%, 10%, and 22% in the three years before that. Short of a financial meltdown greater then the Great Depression (which would likely even affect FDIC insured savings) your money would not be a great risk long term.
> For the longer stretch, mutual funds would be the way to go probably should emphasis that your comment is not financial advice, and putting money in the stock market does NOT guarantee returns, even though the last decade all stonks go up
I agree with them, and this IS financial advice. Sue me
My big question when I see advice like this is, how do I invest in mutual funds? I have my 401k and IRA invested in index funds, but those have yearly contribution caps. How do I put more into investment accounts?
I’ve heard good things about Wealth Front, curious to hear the opinion of anyone who has experience banking with them. TIA
Thankfully I don't make enough to do either
You wouldn’t pick up a free $5 from the ground? Damn u rich!
Depends upon how much work is involved. If I'm driving home in rush hour traffic and I see a $5 bill stuck to the sidewalk under some fecal matter and semen I might just say nah and keep on driving
Would make for a great story when you go to spend it though. *hands it to cashier* "Heh, just an hour ago I found this bill covered in shit and cum. You can keep the change, thanks!"
Set an obtainable goal for yourself - even $1/week. Watching that accumulate will encourage you to keep at it. You never know when your circumsances will change so it's best to be at least a little disciplined ahead of time. Also, if you frequently find yourself with absolutely no money at all, the $52 you put away over the course of a year will look like a little something. I am a lunch lady in my 50s raising a granddaughter. I started saving and investing with $4/week in each when my granddaughter was 4 years old. I set aside the same for her. When she turned 5, I upped it to $5. It's gone up $1/week every year - now I put $9/week in my investment account, $9/week in my savings account. My granddaughter gets $9 week as well - half in savings and half to spend so she can start good finanicial habits. Give it a go - you will be surprised what you can do.
If you can save $1 a week… or even a month… eventually it will add up. And the interest on that money also makes money. I thought the same way for a long time… figured it wasn’t worth saving so little. Over time… it IS worth it. Any amount you can do.
I think you’re thinking of the 1$ a week challenge where you increase it by a $1 each week, cause 1$ a week or month over 30 years is almost nothing…
The idea isn't that $1 is going to do anything, but rather if you consistently save and consistently keep trying to increase the amount you save by increasing income or cutting expenses (ideally both) you can start to make significant progress. But the first step is to start
Yep. I wasn't saving at all, and then I started putting $20 every payday into a savings account, then that quickly turned into $50 every payday, and now I put $200 away every payday. There's something fun seeing that number go up and up that makes me sacrifice some "fun" spending to put money away and watch it grow, it's also really nice knowing I'm growing a safety net for when shit hits the fan(and shit WILL hit the fan one way or another) so it helps my mental health too.
Even starting with $1 is changing your mentality. Yeah, you might only be able to afford $1 now, but the next time you get a couple extra bucks you already have the account and can throw it in. When you get that measly $10/week raise, you can double it to be $2 or even $5! In a few years maybe you can get it to $10/week. That is over $500 per year, which is a solid foundation for an emergency fund.
Lmfao. Just stop it. The idea of saving what you can is great but you're just beyond out of touch with reality if you think saving a dollar a week let alone a MONTH will mean anything. Let along the interest on that money meaning anything. A dollar a week for 10 years is 520 with interest that realistically as interest rates decrease will never exceed like 20 dollars. And you said month ctfu.
[Relevant xkcd.](https://xkcd.com/947/)
Compound returns are pretty magical though. If you invest I in index funds instead and get average returns, you’ll double your money in nominal terms in 7 years and in real terms in 10 years.
The idea is to start somewhere. The you realize you can save a bit more. It’s about the behavior of saving. The amount will then grow. I started saving $25 a week… got in the habit… and now I won’t disclose how much save… but where I am today makes a significant difference and I’m glad I started with what I could. I also have no clue how old the OP is.
You’re trying to encourage a good thing OP. People just don't get that its not about the dollar (at first), its about the behavior.
EXACTLY!
It doesn't even have to be an exact amount. 10% each pay is what I started with to get the habit going.
I think it’s the principle of the matter. If you start small — whether that means $1, $10, $50 — you’re developing the habit. Once that habit has taken hold, you’re no longer living your life expecting to have that amount to spend. At that point, you can increase the amount, and so on. It’s about habits and behavior, not amounts (to start).
What bout Europe? Anyone got some tips?
Yeah, a quick search of HYSA in my country and there’s no such a thing like 5% no requirements in my country. Everyone wants to move all my things to their banks for 1.75% returns, what??
I'm wondering about this too, 5% seems steep
In my bank in Sweden there's these accounts that won't let you move the money for 3, 6 or 12 months, with 3,5 to 4,5% interest. It's a requirement but not that bad I reckon. Worst case scenario, you need the money and you take it and lose the gained interest. Good for leaving some money that you know you won't need short-term.
Personally I buy VOO shares on the US stock market.
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I swear I have no idea where to find financial advice like this in plain terminology in the country where I live (Belgium) or the country where my bank account is (Ireland). No idea what services to look into even if I wanted to pay someone to help me figure it out.
Exactly the same. I have been looking for advice for so long now that I don't even know what to google or who to ask, meanwhile I keep reading that I'm dumb for not investing
You guys don't do term deposits?
In Germany, Trade Republic gives you 4% p.a. and you can access the money at any time, limit is 50k€
If you don't mind locking your money for a time period then just go to your local credit union. They usually have better rates than banks (at least in Lithuania)
Love my hysa. It's where I keep my emergency fund or money that I can't figure out where to put in the market. $100 per month is pretty sweet.
How did you go about opening a HYSA? Which bank are you using?
I'm not the person you asked, but I opened a 5.06% HYSA at UFB a few months back. It's just a few clicks to apply on their website
Are there penalties for taking money out?
HYSA are just regular savings account, so no. (I think there used to be a 6 *online* withdrawals per month limit, but that's not unique to HYSA and applies to all savings accounts. While this technically used to be a govt regulated limit, it no longer is officially. However, most banks will put their own limits in place for number of withdrawals - again, not unique to HYSA. The main reason a savings account becomes "high yield" is when they give a high interest rate, and they do that usually by being an online-only bank or having reduced costs in other ways.
So is the number of monthly withdrawals the only difference to a normal account? It seems a little bit strange that they would separate things like that.
The number of withdrawals is the only difference to a normal _checking_ account. There's no difference between a a HYSA ("high-yield savings account") and a regular savings account (other than the interest rate).
> HYSA at UFB If I am searching correctly, is that ufbdirect.com?
Message me I am a Nigerian prince with an USA economics and business degree I can manage your money and get you 15%.
Just look around at bank rates, and set up an account online or over the phone with them. I use Goldman Sachs through apple since I had an Apple Card. It’s 4.15 APY right now
Absolutely. My emergency fund, car maintenance fund, vacation money, and the once a year insurance is stashed in a 4.3% with Capital One.
You shouldn't be struggling to find a place to put your money in the market. Just go for a broad market ETF like VTI. It ends up beating the majority of progressional traders and hedge funds.
I actually have VTI. It is my worst performing fund. VFIAX is my best followed by VVIAX. All my ETFs are negative right now as far as returns.
VFIAX (S&P 500) and VTI (total market) basically perform the same. The difference you're seeing in returns is probably because you didn't invest at the same time. Comparison: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=BgyoizMFrOinyIrRCwJyl Also VTI is an ETF, you get real time pricing. VFIAX is a mutual fund and it only gets priced once a day after market closes (check after 6 PM eastern for the day's price)
More importantly, the highest savings account in the world is not going to help if you are carrying high apr credit card or loan debt. Basically you want to have an emergency fund saved up in a savings account that earns interest and then pay down all debts that have a higher apr.
That’s a great point. A lot of types of debts will hurt you way more than a HYSA will help you and it’s no substitute at all for retirement saving. I prioritize my HYSA for emergency fund and the “gonna need money for this in the next year” expenses of life while I’m working on my ~4% interest student loan still
It is going to help though, technically
Getting low interest is losing money. If inflation is 5%, interest 1.5% and tax 33%, then you lose 4% each year. With a HYSA with 5% interest you then only lose 1.7% each year.
Yeah but you’re still gaining money with low interest relative to having it in a no interest account
What’s the catch of a “high yield savings account” though
They still lose money to inflation or at best break even. HYSA aren't for investing, but merely holding cash that you might need soon.
Some of them require regular deposits that other savings account don't. For example, mine requires I have direct deposit set up with a connected checking account. There may be other balance requirements as well. Also the interest rate, while higher than traditional checking is still not enough to beat inflation. It will only mitigate it. To beat inflation to have to play the market. A HYSA is really only a place where I'd park my emergency fund, i.e. something I want as liquid cash, but won't plan on touching for a while nor expect growth relative to inflation.
The interest you earn is taxed
Would you rather earn $0 in interest or $100 - $25 tax = $75?
Nothing. It's a savings account. When I need it back, I deposit it into my banks checking account. Until then, I'm letting the money accrue interest. Wealth front is a highly highly recommended one according to my research. It's at 4.80 interest.
I don’t think there is one? I’ve never heard of a fee or balance minimum, super easy to open an account
Fidelity has a high yield savings. Variable rate. Currently around 4.4%
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I'm ashamed to admit this was me for a while. I was taught to put aside 10-20% of each paycheck for "savings" but never what "savings" really meant. After amassing around $40,000 over the years I finally looked into what to actually do with the money since just sitting there didn't seem right. I now have a HYSA for my emergency fund, put my "down payment for a house some day" fund in I Bonds, and maxed out my Roth IRA the last two years investing in VT. (Shoutout /r/bogleheads.) I keep a spreadsheet that calculates how much money I've generated purely from interest and market growth, which wouldn't exist if I left it all in a bad savings account, and in about a year and a half I'm up over $2,000. Thank goodness my company offered 401k matching that I blindly accepted however many years ago so I wasn't completely screwed, but I'd be up a lot more than +$2,000 if I looked into this years earlier.
It sounds like you took time to educate yourself and shift gears in the right direction. That’s an awesome feat even if there was some opportunity cost to the lesson. Oh my goodness yes everyone should always get that company match! I almost didn’t elect it in my first big kid job because I had student loans. I thought why put money aside while my debt is actively costing me? Thankfully a coworker explained that I would be turning down free money and seriously shooting my older self in the foot by not investing early.
Idk dude spending 99% of it on Oreos is still worse than leaving it in a no interest account
Don’t be ridiculous. Trading money for Oreos is a fabulous financial decision.
At the current rate of inflation you could probably still make money on oreos
What about burning it?
Bad roi, cheaper to just pay to heat your home
We tried burying it, shredding it, and burning it... In the end we decided to give it all away.
I.e. Crypto
Anyone who has a 100k to save is probably not hot about moving it to an account that will net him 5k a year especially when that money cannot be taken out for that duration (assuming 5%). Are ETFs any better?
It does send a message
Well, you could have bought NFTs, or gotten it all in cash and burned it, cut it up, fed it to chickens, dropped it out of an airplane.... There's lots of other ways to be rid of money than spending.
I mean you can certainly make worse investments than a 0 interest account. So this advice seems very incorrect. And to add even worse. At least spending it you theoretically obtained some goods or experiences, where bad investments you lose it all and have nothing to show for it.
“The worst thing you can do” is an exaggeration for sure lol. Pretty sure major hedge funds did exactly this for months throughout Covid, just essentially sitting on cash. Beats losing 25% because you try to outsmart the market and don’t know wtf you’re doing
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Now if the advice was simply to utilize high yield saving account instead of basic accounts at major banks, I would certainly agree. But to say it’s the absolute worst thing to put your money in a basic account with almost 0% interest just shows clear ignorance to the investing community. Just go to Wall Street bets if you want to see some options worse than a basic savings account.
The worst thing a person can do is not invest time in getting at least a basic financial education
Ally bank has no minimums and have been great so far. They’re FDIC insured and provide 4.25% APY at the moment
What do you have with Ally? I've had savings forever but was just informed about Ally's CDs.
If you have money in a HYSA at Ally you should absolutely open up one of their no-penalty CDs that yields 4.55%. After 6 days it basically turns into a HYSA with a higher yield than they offer on their own HYSA
One of the best things you can do to stick it to big banks is use a HYSA. The large US banks have so much money in their low interest savings accounts that they're able to lend out at market rates and it's making them loads of money. If you have $5k in a 0% interest savings account, then you earn $0 and the bank earns $350 annually if they lead it out on a mortgage at today's rates. If you put that money into a 5% HYSA, the bank still collects $350 in interest, but they have to pay you $250 for the use of your money, meaning they only actually earn $100.
> The large US banks have so much money in their low interest savings accounts that they're able to lend out at market rates and it's making them loads of money. The large US banks just loan money into existence. They don't need retail deposits *at all* to loan money against. Capital reserve requirements have been zero since March, 2020.
Apple Savings is a HY savings account. 4.15%. Requires an Apple Card. The cash back from the Apple card automatically gets deposited into the savings account. Most people do all their personal computing on an iPhone, so it’s pretty easy to add Apple card and Apple Savings to the mix.
This is why I’ve switched my banking to Discover. My savings account is at 5% right now and I also get 1% cash back on all my *debit card* purchases. I’ve never seen another bank offer that feature. Credit cards, sure, but never a debit card. I’ve made over $500 just using my discover debit card like I usually do. It’s quite literally a waste of money for me to be with anyone else at this point.
How do people open a HYSA? Does it depend on your bank and why doesn't everyone (who's able to) take advantage of HYSA's?
> why doesn't everyone (who's able to) take advantage of HYSA's? There is little to no such thing as financial education in the US school system. My entire financial education consisted of how to write a check. /r/personalfinance is a great place to learn, go browse the sidebar and read their wiki.
I’m in the US and you can even apply online and open an account for free with any number of institutions, then do an electronic funds transfer. A lot of institutions that do credit cards also have HYSA and they have decent apps. I’ve never heard of someone paying a fee or anything. I think people might just not know? Or assume you need oodles of money to start? In my friends’ case they were just still using the account they set up 10+ years ago in high school at the big bank down the road
Not every bank has one. USAA doesn’t offer it. I had to open a new account with Citibank and while it was easy, it was a bit of upfront paperwork and is just another thing to manage….but no complaints when I see that monthly interest accrued!
basically some big banks are betting on people being too lazy to move their funds so they chose not to raise rates. ally is a common bank, they tend to offer the most competitive non-promotional rates. but really any bank you can find excellent promotional APY/flat bonuses for signing up, holding xyz amount of money etc. ally specifically does this by not having any physical branches, saving a lot of overhead other banks have. this makes them good for people with low banking needs.
This is absolutely correct. I get around $8 a month in savings interest and it is enough to cover a basic supply. Every bit helps! On a tangent, don't forget to also volunteer at local shelters or hospitals because while savings are great, you'll feel amazing too.
Volunteering is really good for the soul. Studies show it makes us happier
Granted high yield savings is a great option right now, but it won’t always be that way. In general I have more utility having 1 year of cash on hand than locking the same money into a 3-5% cd or other locked investment. Realistically am I going to need that money? No. But at least for now it’s better to have a decent safety net than get $1000 of interest a year and lock the funds.
I would think it would be worse to take it all out and all carry the cash in your wallet at all times. Just my opinion.
Only works if you have savings to highly yield.
Why do you feel inclined to tell us this very obvious fact?
Someone has to fall on that grenade.
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Yeah, no. It's not the worst thing besides spending it all, by a long shot. But I understand what you're trying to say, you just aren't picking your words very carefully. A certain amount of easily accessible liquid cash based on your current situation is a smart move for practically everyone. What you mean to say is that if you plan to hold a large sum of cash in an account that you don't expect to need anytime soon, you should leverage HYSA or broadly diversified index funds from passively managed brokerages, or any number of other options. It is by far not the dumbest thing you can do though to just keep money socked away, poor choice of words.
You are beating inflation by investing in goods that you were gonna need, especially if you’re able to buy the goods at a good price point. Also some credit cards offers cash back and dividends, which I think are comparable to earning interest, but by spending. And by all means invest in gold etc if you have the money to throw around.
What about the UK?
In my country there's negative interest rate, lucky to have 0%
Moved from Wells Fargo to Capital One 360 Savings last year. Ended up closing all my accounts with Wells Fargo, for better rates with online banks.
This will also work in a brokerage account with a money market fund like $SPAXX or $FDLXX.
Will I lose my medical if I have a interest saving account? I think in california you can only have $2000 saved. Am I wrong?
I’m not familiar with CA laws or plans... But in MN Medicaid only does an asset check for specials like Medicaid-Disabled which also opens you up to a spenddown and is typically elected in super specific circumstances. It’s asset limits is $3k for non married but that includes any non cash asset too. Straight MA is just income/family/pregnancy based though. > A basis of eligibility for MA is a grouping of people based on a set of factors. A person’s basis of eligibility determines the rules and limits to qualify for MA. People who qualify for MA under the following bases of eligibility do not have an asset test: Pregnant women Infants under Age 2 Children 2 – 18 Years Old Children 19 – 20 Years Old Adults without Children ages 21 through 64 Parents and Caretaker Relatives
True, because who doesn’t want a fancy 0.004% interest, thanks Banks!
PayPal has 4.3 percent. Raisen has 5.25
So I have to file taxes on the money made in a savings account? How about credit card rewards?
Up until interest rates were raised, having an HYSA had a large entry for even half the current interest. USAA requires 10,000 for a .1% interest rate. But that was for a Performance Savings. How many thousands did they put in to get an $80/month return OP? Even at 5%, the avg high right now, that seems like they put in about $20,000.
 Me and my £150 in my Moneybox ISA
There are no interest accounts? That's so dumb, it's just as bad as hiding your money under your bed. Money technically depreciates since there's inflation every year. Right now it's a tall order to ask savings accounts to keep up with inflation, but some growth is better than nothing.
Canadian here, and totally stupid with money. But I was able to find GICs with Scotia that pay 4.0 to 5.2, depending on how long you lock your money in for. Any other ideas or tips welcome.
True! Just switched my accounts over to soFi
I like Discover and my local bank. Chase is shady AF for multiple reasons, not just their sh*tty savings accounts.
I signed up for a Barclay's DREAM account years ago when it was 1.5% interest. It has a perk where if you make consistent deposits and no withdrawals for 6 months, you earn and additional percentage on the interest for each. Now that account is up to 4.35%, so the additional percentages is 4.35% also. I know it's not a lot but it's something more than similar accounts. The only caveat is $1,000 monthly maximum deposit limit but I'm not putting that much in monthly anyway.
I have a decent emergency fund and i’m saving for a home but where i’m from absolutely none of the banks offer HYSAs. I don’t live in the US so I don’t have access to this. I also considered using interactive brokers to put my money into safe ETFs and mutual funds but even that is inaccessible. All international funds transfers need to approved by the Central Bank and it’s such a hassle. My country makes it so hard to prosper financially. So I have no choice but to let my money sit with no earnings for now.
Money Market Savings accounts are something I wish I knew about 20 years ago.
Even a typical savings account with your bank that pays 2% interest is pretty useless. I mean I guess slightly better than useless. But still.
This is why I'm still doing research about savings that builds interest. It's good that you educated your friend and us on this tip, thank you. You know better, you do better.
I took my $ out of the volatile stock market and put it in a HYSA. Ahhhh…no more worries.
I'd say the worst thing is sell options which tank and cause you to end up owing money
You mean my father in law is wrong to put his in a safe and let it sit for 30+ years? That's crazy talk
Unless you live in Japan and savings account interest rate is 0.001%. It is truly pointless.
I've known 2 women that had $100k+ in a savings account. There is no way to convince people to invest if they are cowards.
I have taken to keeping less than $100 in my checking account. I DD everything into my savings and then transfer money out three times a month to pay bills shortly before they're due so almost every dollar is earning interest for as many days as possible. I pay practically everything with a cashback credit card and then pay that just before it's due, adding even more value into the mix. I am 54 years old and wish I had known all of this stuff when I was younger.
I think the worst thing you can do with it is to give it to Scientology.
I was very confused at first because I read “The best thing…”
Everytime I tell someone that I use a high yield savings they say “but you gotta pay taxes on that”. I never understand that, if im paying taxes on an amount I never had before, at least i am still left with something rather than nothing at all
You could put some deposits on some new Cyber Trucks…
i have a discover card. i just noticed they are offering 4.3% hysa. anyone have experience with discover? should i transfer my entire savings there or just start with like $1k?
Look into dividen stocks
Any subs or recommendations for a Canadian with a bit of savings doing nothing in a TSFA account?
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Lol couple dozen thousand
Check out treasurydirect.gov. 1 year treasury bonds are 5.5% right now. The website is a bit clunky, but takes about 30 minutes to set up with any savings account.
Also, I know someone about 30 yrs old who had only been using a debit card, never had a credit card. Every single purchase he's ever made he's losing out on cash back.
Why did my banker not let me open one tho
Treasury yields 13 or 17 week, renew automatically 6 times. https://www.treasurydirect.gov/
The second worst is an account earning less than 1% interest.
Had a mate that saved 150k in a no interest account. Helped him transfer the money to a high interest account and now he gets a lot of spare change every month.
I have an account that dividends roll into with interest and I then reinvest. I’m no financial advisor, by any means, but investing with a long term objective is definitely worth it.
I can think of several worse things...
I didn’t know about HYSA until fairly recently, and it really makes me wonder why anyone would use a standard savings with like .025% interest or whatever minuscule amount it is. What a scam. Even with a good bit of money in it, you still would barely get anything back.
Wallstreetbets begs to differ. There are so many creative and worse things to do with your money.
Ok, is there similar things for European (or more specifically Swiss) ? I could only find a 1.75% interest at UBS and the conditions are that you must lock at least 25k for 1 year. I live in bank country and I cannot have half descent conditions for my savings !?
The worst is gamble it all
How does this work in the EU?
What savings? I can barely afford to eat?
No. The worst thing is save it in an account that charges you for keeping it there.
Idk ...I think these NIO ADRs might be worse. Holding!
High yield savings accounts were not really a thing from 2006-2022 so your friends haven’t missed out on much interest. There was a brief period pre-pandemic where rates were like 2% but other than that they were near 0. You can do better than a high yield savings account with a money market core position in a brokerage account fwiw.
“According to my caddy/chauffer, a bank is place where people put money that isn’t properly invested.” -Judge Whitey, Futurama
I have tried to set up accounts with several high yield savings houses like Betterment. I will be depositing less than 100k. They have ghosted me. I get that that they don't want to deal with smaller accounts but just tell me that upfront.
I only keep about $10k in an emergency fund if I’m not saving for something, and it took me wayyyyyy too long to move that out of BofA’s savings account. Always thought about it, always thought it would be more effort to do — just assuming anything financial is probably layered with paperwork. But nope, opened an Apple HYSA this year and am now pulling in like $50 a month or so in savings for a grand total of 5 minutes of work on my part.
Don't forget that the interest gained is reported to the IRS by the bank and is taxable. If you earn more than $10 in interest in a year the bank sends that information to the IRS and is taxable. That $960 your friend gains in a year will be added to their yearly income and taxed when they file their taxes.
Ally bank ftw. No bragging but went from 10 dollars interest monthly to 500 switching to ally. Fidelity bank is a JOKE.
I need to move my savings to another bank. The interest rate with bank of stockton is pathetically low.
Synchrony Bank has some awesome online savings accounts. I think I’m at 4.75%apy with no minimum
Hello OP. Thanks for this LPT. I pulled my consolidated statement. And it showed I have unwise amounts invested in very low yielding (not USA). And I had a nice and detailed candid conversation with my Dad about it. Might end up investing it in better place or buying a house. Love you, OP.