What To Do With The Money You Don’t Have Invested

M_PIC

It is not 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.

Side note: if you are a beginner when it comes to investing and want to know what other things you should be doing  before starting your investing journey join the (free) 8-day program “Preparing Yourself To Start Investing” here.

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 bank 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 recently. 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. 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 my research of high yield savings accounts that offer high interest rates (even more for the CD option!), minimal (if any!) fees, reasonable account minimums (if any) and the peace of mind of being fully FDIC insured:

 

Savings

Source: Bankrate.com. Rates as of 05/16/2018.

As you noticed – the interest rates shown are significantly higher than the national average of 0.006% 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 oppose to pennies.

This post is NOT sponsored. I am providing information based on research and/or services I would personally feel comfortable with. There might be banks out there that offer higher rates but I also made sure to look at reviews as I completed my research. Any bank with too many customer complaints was dismissed from the list. 

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.

As always, I also encourage you to do your own due diligence! For as long as I can remember Bankrate’s website has provided information on the best savings accounts based on where you live right now.

It is possible interest rates change by region so I encourage you to check out the site and enter your zip-code to check out your best options. 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 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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