T Nation

Opening a Savings Account


#1

This place has some knowledgeable finance guys, so I figure i’ll ask here-

How should I go about looking for a bank to open a savings account/general guidelines with savings accounts?

Thanks much.


#2

Interest rates are so low it doesn’t matter.

Who do you have your checking account with? Will you be needing a mortgage soon? What bank’s ATM are convenient for you? Will you qualify for a CD?


#3

This is really about what you’re happy with. Longer terms are going to pay more interest but interest rates are low now so a spike in rates (unlikely, at least where I am) can cost you.

Generally, bonds/term deposits/etc are not a good tool for building wealth especially when rates are low. I always have some but that is to ensure I have something incase everything turns to shit.

EDIT: if we’re talking about everyday savings accounts, then meh, whatever is convenient (internet banking, no fees, etc)


#4

I seriously just spent 20 minutes cruising/cringing over the presidential thread, where you were boosting up on a particular candidate, while some folks pointed out the idiocy of it all.

And then I see you have to ask how to open a savings account. This is known as a moment of clarity.


#5

What’s the purpose of opening the savings account? If you’re just looking for a separate rainy day account just avoid fees and/or minimum balances magick. Also what Dr. P said.

If you’re looking for a growth vehicle, in today’s economic climate, there are other options.


#6

[quote]mutantcolors wrote:
I seriously just spent 20 minutes cruising/cringing over the presidential thread, where you were boosting up on a particular candidate, while some folks pointed out the idiocy of it all.

And then I see you have to ask how to open a savings account. This is known as a moment of clarity.[/quote]

You might want to revisit dude’s posting history in that forum before this leap to judgment.

We don’t always agree, in fact we see the world from very different perspectives. However he/she is anything but what you’re implying here.


#7

If you open up an account make a habit of transferring money every week to it, and make it so you cant get access to your savings account through your debit card. I like to make sure I have at least 4 months rent in there at all times in case something happens. After that I save it some more in longer term stuff.


#8

[quote]Aero51 wrote:
If you open up an account make a habit of transferring money every week to it, and make it so you cant get access to your savings account through your debit card. I like to make sure I have at least 4 months rent in there at all times in case something happens. After that I save it some more in longer term stuff. [/quote]

That’s a good strategy.

When I was 19 I set up an ingdirect savings account and split my direct deposit so most of my paycheck went into the savings account. It takes a few days to transfer funds from ingdirect and was an effective way to not only save, but also avoid spending money foolishly.


#9

[quote]Aero51 wrote:
If you open up an account make a habit of transferring money every week to it, and make it so you cant get access to your savings account through your debit card. I like to make sure I have at least 4 months rent in there at all times in case something happens. After that I save it some more in longer term stuff. [/quote]

x2. I do the same.

In line with usmc and Dr. P, I think the purpose is key here. A savings account is good for having this kind of rainy-day fund on hand, but not as a growth vehicle.


#10

When I was 19 I saved 20K $ in my saving account. Spent it foolishly in foreign countries the next year.


#11

[quote]usmccds423 wrote:
What’s the purpose of opening the savings account? If you’re just looking for a separate rainy day account just avoid fees and/or minimum balances magick. Also what Dr. P said.

If you’re looking for a growth vehicle, in today’s economic climate, there are other options. [/quote]

A growth vehicle. I save an awful lot of my earnings, and seeing it just sit in my checking account (at Bank of America) not doing much makes me sad.

I’ve saved enough at this point to comfortably sit on my ass and do nothing for at least 8 months. I feel that it’s time to start doing something more with my earnings for long-term financial security.


#12

What I’d loke to see is someone define the entire spectrum of places to put your money from short term to long term, for example (my stab with what I know):

Wallet (short term)
Bank account
Savings (what are the choices here, short to long term?)
Investments (stocks)
Mutual funds
Hedge funds
Bonds
Roth IRA
401k (longest term)

Im guessing there is a lot missing…


#13

[quote]magick wrote:

[quote]usmccds423 wrote:
What’s the purpose of opening the savings account? If you’re just looking for a separate rainy day account just avoid fees and/or minimum balances magick. Also what Dr. P said.

If you’re looking for a growth vehicle, in today’s economic climate, there are other options. [/quote]

A growth vehicle. I save an awful lot of my earnings, and seeing it just sit in my checking account (at Bank of America) not doing much makes me sad.

I’ve saved enough at this point to comfortably sit on my ass and do nothing for at least 8 months. I feel that it’s time to start doing something more with my earnings for long-term financial security.[/quote]

I assume that you want this for something besides saving for retirement? My answer, because I’m young, naive, and scared that I’ll never save enough for retirement, would be plunging as much as possible into some sort of retirement account (be that a 401k through your employer or your own IRA) but I’m sure that the good Dr. Pangloss, countingbeans, and others can give much better advice on your medium-term investment options.


#14

[quote]ActivitiesGuy wrote:

I assume that you want this for something besides saving for retirement? My answer, because I’m young, naive, and scared that I’ll never save enough for retirement, would be plunging as much as possible into some sort of retirement account (be that a 401k through your employer or your own IRA) but I’m sure that the good Dr. Pangloss, countingbeans, and others can give much better advice on your medium-term investment options.[/quote]

My made an edit to include an answer to Dr. Pangloss, but it appears that it didn’t go through.

I plan on buying my first house sometime next year (probably June/Julyish), and so will most likely need a mortgage.

I guess I’m just looking for options when it comes to long-term investing and planning. I don’t know much about this stuff, and the research I’ve done make it sound convoluted.

This is probably why you have people making a living doing this for others.

What Carbiduis talked about would be immensely helpful.


#15

[quote]carbiduis wrote:
What I’d loke to see is someone define the entire spectrum of places to put your money from short term to long term, for example (my stab with what I know):

Wallet (short term)
Bank account
Savings (what are the choices here, short to long term?)
Investments (stocks)
Mutual funds
Hedge funds
Bonds
Roth IRA
401k (longest term)

Im guessing there is a lot missing…
[/quote]

I’ll let someone else provide a more detailed response, but it doesn’t really work this way (long vs short) for a lot of these. Take stocks for example, you may want to invest in x stock for a short term gain while investing in y stock for mid or long term gains / dividend distributions. So it is pretty convoluted.

For most people a checking & savings account, a 401(k) type of retirement account, and an IRA will be your bread and butter for retirement purposes.


#16

[quote]magick wrote:

[quote]ActivitiesGuy wrote:

I assume that you want this for something besides saving for retirement? My answer, because I’m young, naive, and scared that I’ll never save enough for retirement, would be plunging as much as possible into some sort of retirement account (be that a 401k through your employer or your own IRA) but I’m sure that the good Dr. Pangloss, countingbeans, and others can give much better advice on your medium-term investment options.[/quote]

My made an edit to include an answer to Dr. Pangloss, but it appears that it didn’t go through.

I plan on buying my first house sometime next year (probably June/Julyish), and so will most likely need a mortgage.

I guess I’m just looking for options when it comes to long-term investing and planning. I don’t know much about this stuff, and the research I’ve done make it sound convoluted.

This is probably why you have people making a living doing this for others.

What Carbiduis talked about would be immensely helpful.[/quote]

If you’re looking to use all or most of it for a down payment there’s little use doing anything with it at these interest rates. You could throw it in a short term CD or money market account I guess.

For long term investing I would consider opening a Roth IRA and/or Traditional IRA. If you have a traditional 401(k) I would open a Roth IRA. I personally like having both a pre and post tax account.

If it’s a considerable amount of money and you intend on continuing to invest I would consult with a professional.


#17

If you plan on buying a house in the next 5 or less this thread was kind of pointless.


#18

[quote]usmccds423 wrote:
For most people a checking & savings account, a 401(k) type of retirement account, and an IRA will be your bread and butter for retirement purposes. [/quote]

I’d be curious for someone with more financial savvy than me to give their opinion, but I have the (very general) sense that this is all most people will ever need, and that fucking around with more than this they’re just as likely to lose money as they are to gain money.

For people that have some extra scratch to play with that won’t feel any pain from some short-term losses, that calculus changes a little, but for normal schmoes who are just trying to pay the bills, get the kids through college, and retire with a couple of quality years left to play with the grandkids…I’d think those would do just fine.


#19

[quote]ActivitiesGuy wrote:

[quote]usmccds423 wrote:
For most people a checking & savings account, a 401(k) type of retirement account, and an IRA will be your bread and butter for retirement purposes. [/quote]

I’d be curious for someone with more financial savvy than me to give their opinion, but I have the (very general) sense that this is all most people will ever need, and that fucking around with more than this they’re just as likely to lose money as they are to gain money.

For people that have some extra scratch to play with that won’t feel any pain from some short-term losses, that calculus changes a little, but for normal schmoes who are just trying to pay the bills, get the kids through college, and retire with a couple of quality years left to play with the grandkids…I’d think those would do just fine.[/quote]

Pretty much.


#20

Put it all on Enron