What To Do With The Money You Don’t​ Have Invested (Part I)

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NOTE: This post is updated as of 2/6/19.

It is no secret that I am a HUGE fan of the stock market. I absolutely love the idea of creating wealth over time by making educated decisions and putting my hard earned money in companies, funds, and investments I trust and have researched thoroughly.

With that said, something to keep in mind is that we shouldn’t have all of our money invested. There is a “little” something called emergencies that does not give us a warning. They just show up. And so, for that reason, before putting any money in the markets, we need to first make sure we have money in an emergency fund or any fund that is LIQUID and easily accessible when needed.

The issue with having money parked in a bank account, however, is that many times we are collecting pennies. The interest paid by many popular banks is disrespectful to many of us and doesn’t even come close to the rate of inflation – the rate at which the dollar loses value with every passing day.

Based on the Bureau of Labor Statistics, something that used to cost $100 in 2008 costs about $118.23 today. If your money is not growing at a rate somewhat close to the average 2.5% interest rate per year, it is losing value. 

SUZE

Some banks even have the nerve to charge a fee for holding your money while they’re turning around and lending it to others at ludicrous interest rates. The nerve. And let’s not even get into poor customer service. 

For that reason, I would encourage you to strongly consider opening a high yield savings account or CD at a financial institution that you can trust.

I’ll be the first one to admit that I have been guilty of leaving my hard earned savings collecting dust in bank accounts that showed me zero respect. Getting notifications about a deposit of $0.25 cents or $0.39 cents in interest every month on my savings left me with my mouth open.

I noticed such disgrace for the first time in my early 20’s and then again early last year. I couldn’t be mad at the bank. I was mad at myself for leaving my money there. 

The shock intensifies because I have seen with my own eyes the way in which money that is invested in quality companies can grow exponentially over a fairly short time period. And, so, I can’t believe the lack of concern some banks have when it comes to offering better rates to their customers. 

With that said – I am happy to announce I’ve finally taken action into opening a high yielding savings account. One day I realized that I have been focusing so much on investing that I kind of forgot about my savings. Well, those days are over!

I wanted to share information on my favorite savings accounts at this time. They include:

CIT Bank –

The highest interest rate I have seen to date is CIT bank Savings Builder program which pays 2.45% interest as long as you are enrolled in ongoing monthly deposits of $100. Check out this post for full details on that.


Savings Builder

Goldman Sachs Marcus –

Some of you might recognize Goldman as creme of the crop investment bank and Wall Street symbol. However, the business has branched out into consumer services and has done incredibly well. In the fall of 2006, Goldman opened the doors of “Marcus” – its savings account exclusively for the average person with some pretty awesome interest rates right from the beginning.

As of the time of this post, the bank is offering 2.25% on savings!

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Ally Bank 

I first started to learn more about Ally when they acquired TradeKing a few years ago and created Ally Invest which is one of my favorite accounts for investing. What’s cool about Ally is that they are pretty much a full-service online bank.

In addition to investment accounts, they offer credit cards, retirement accounts, loan services, checking, savings, and multiple other services.

As of the present time, they are paying 2.20% interest on ALL balance tiers.

As you noticed – the interest rates shown are significantly higher than the current national average of 0.09% which can mean a significant difference when it comes to the money you accumulate in your savings account/emergency fund over time.

The rate might not be keeping up with inflation “per se” (this is where quality investing comes in). However, you’ll at least be getting dollars from the bank as opposed to pennies.

Keep in mind that the savings accounts shown above are mostly online (there are no brick and mortar locations). Also, if your checking account is not conveniently connected to savings – you won’t be able to automatically transfer money from one account to the other whenever you want. You might actually have to through a withdrawal process – which is actually a GOOD thing.

Although I highly recommend the banks noted above, I also encourage you to do your own due diligence!

In summary, some of the most important things to considering when opening a savings account include the following:

  • Minimum deposit requirements (if any) – make sure you aren’t being charged a fee for having less than a certain amount of money in your savings. 

… Speaking of fees

  • Look closely at the fees – make sure the fees are minimal (if any at all) for things like transferring funds from one account to another in the event you need the money.
  • Look for the highest yield you can possibly get with no hidden fees or hidden anything. ALWAYS look at the fine print. If something sounds too good to be true it probably is.
  • FDIC insurance – This is standard pretty much for ALL bank accounts in the U.S but is always good to double check. This means your money is insured at any single financial institution for up to $250,000.

After you narrow down your choices, I would HIGHLY encourage you to search for Google reviews of the savings accounts you are considering. You want to make sure you are fully informed of any “catch” or anything you might have overlooked that could be important. As mentioned, I also like to take a look at any customer complaints and see whether or not they would be a deal breaker for me.

One of my favorite go-to sites for reviews of anything money related is Nerd Wallet. However, go with whatever site you trust as long as it provides credible information.

Hope this post encourages to move your money out of “disrespectful” banks and into an institution that actually values your hard earned money.

Questions? Comments? Let me know below! Also, remember you can always email me at girlsonthemoney@gmail.com.

Cheers to profits!

Love,

Mabel $

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Already have your savings on track and are ready to graduate into investing? Join the waiting list for the next edition of the Stock Market Investing Bootcamp for Beginners! 

One thought on “What To Do With The Money You Don’t​ Have Invested (Part I)

  1. Pingback: What To Do With The Money You Don’t Have Invested (Part II) – Girl$ on The Money

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