Highest interest earning accounts

[Quattro Pete]

Originally Posted by Fattylocks
I used to have an account with ING bank. Paid 5.0% They were bought out by cap one and the rate slowly but surely declined.

Yup, they all play those games. Rate only goes down, but never automatically goes back up.

 

[JHZR2]

Originally Posted by Quattro Pete
Originally Posted by Fattylocks
Sure about that capital one 360?

I logged in yesterday and my account is paying 0.50%


How old is that account? If it's older, then it doesn't pay much. You would have to ask them to open the new "360 Performance Savings" one and transfer your funds from the old account there. They won't do it automatically.



I faced that. My old ING direct accounts are stuck in a lower interest rate, so I just opened new 360 performance accounts from the app, and transferred funds over. For whatever reason they refused to just bump the old accounts to the "standard" rate, but its straightforward to open as many as you like and transfer. Nothing to it.

But I suspect that the interest rates on everything are crashing right now - havent looked at 360 recently, but I got a notice from my HSA that the rates were dropping significantly (from the pittance they were)...

 

[Wolf359]

Originally Posted by JohnG
Quote
Lots of companies are cutting their dividends now so don't count on them in the future. Of course that's in the oil sector so if you're buying dividend stocks in that sector, you shouldn't surprised if they get cut.

I always bought growth stocks, that has normally been the best performing sector of the market. I didn't care for dividends as the point of investing is to get the highest returns commensurate with the risk. Dividend stocks were always considered safer, lower risk investments but I always figured I had time and if I'm going to swing, I'm going to swing for the fences so to speak and not bunt or single like dividend stocks.

High yield savings account are really for short term savings. It's actually riskier putting money in a savings account long term because you basically guaranteeing that you probably just going to keep up with inflation and over time your savings will be eroded and won't really grow. Sure the stock market is riskier, but no over the long term. Of course it's a very tough market to get into right now, but dollar cost averaging might be the way to get in now.


Yes, you are right. Ford just ended their dividend, so I sold it.
I've been pulling $18,000.00/yr from dividends since 2009, and my "principal" has continued to grow during that time.
Good solid stocks that pay a decent dividend? How about Pepsi, Coke, Phillip Morris, Lockheed Martin, WalMart, JPMorgan, and quite a few Mutual Funds of that category.
Exxon Mobil just froze there dividend, but will continue to pay it. They just won't increase it.

Except for the risk involved, they all beat any savings account out there.


It's one thing if you need the money. But if you don't dividends just means you have to pay taxes on your growth. With growth funds, they typically don't pay dividends and the growth is in the stock price. So you don't end up paying taxes on it until you sell which allows you to grow your portfolio faster.

Originally Posted by supton
I've never bothered to chase high interest bank accounts. For all my life, if I had enough money that would appreciably grow in one... I'd be ahead by putting that money towards one debt or another. I get the premise, make a buck when one can, but it just doesn't seem like a sizable emergency fund is going to make that much money over a year, not worth the effort of running around for it.


I've been investing in the market for decades. As I mentioned before at one point I was investing about 2k a year in the market in an IRA. After about 7 years, instead of it being worth a little more than 14k, it was worth 45k. That's what happens when you invest in the stock market instead of a savings account. Even when the market collapsed, it went down to 25k but still more than a savings account. Market recovered and I've continued investing so it's up there. That's what some years of 20-30% return will do for you.

 

[supton]

Originally Posted by Wolf359
Originally Posted by supton
I've never bothered to chase high interest bank accounts. For all my life, if I had enough money that would appreciably grow in one... I'd be ahead by putting that money towards one debt or another. I get the premise, make a buck when one can, but it just doesn't seem like a sizable emergency fund is going to make that much money over a year, not worth the effort of running around for it.


I've been investing in the market for decades. As I mentioned before at one point I was investing about 2k a year in the market in an IRA. After about 7 years, instead of it being worth a little more than 14k, it was worth 45k. That's what happens when you invest in the stock market instead of a savings account. Even when the market collapsed, it went down to 25k but still more than a savings account. Market recovered and I've continued investing so it's up there. That's what some years of 20-30% return will do for you.

Right. That's why I have a cheapo savings account (which holds my emergency fund) which is alongside my checking account (money goes into that and sadly out of it too fast); I have my 401k which gets... not enough but what goes in is split between a growth fund and a retirement target fund. I could put my emergency fund into "high interest" rate savings account but it wouldn't be at the same bank as my checking account, which may lead to problems with my bank; and if I had enough money in my emergency savings account that I felt it worthwhile to do this sort of thing... odds are, I would be better off either paying down debt or investing into this or that stock instead.

 

[Wolf359]

Originally Posted by supton
Right. That's why I have a cheapo savings account (which holds my emergency fund) which is alongside my checking account (money goes into that and sadly out of it too fast); I have my 401k which gets... not enough but what goes in is split between a growth fund and a retirement target fund. I could put my emergency fund into "high interest" rate savings account but it wouldn't be at the same bank as my checking account, which may lead to problems with my bank; and if I had enough money in my emergency savings account that I felt it worthwhile to do this sort of thing... odds are, I would be better off either paying down debt or investing into this or that stock instead.


I don't even have a savings account anymore, just a checking account. I just leave the money in the checking account and transfer money in or out of my Fidelity account. Usually takes just a day or two to transfer in or out. I gave up balancing my checkbook years ago, I just look at the statement.

 

[supton]

I try to generate a budget for the year, and then at the end of the year, see if I stuck to it. I rarely do, but it averages out in the end to some net surplus. I try to keep myself accountable... at least in theory. Every expense should be categorized, that way if things get rough, we know where the money goes.

Savings account is old habit, although I recall when I set it up, it and the checking account were free if I set it up so as to automatically move $25 per month into savings. Something like that. Might still be true! I also like keeping the two, if anyone wipes out one account the other should still be around, after all we don't use our debit cards for anything. At least in theory the savings account might be safe...

Wife took over balancing the checkbook. If I had to do it, I'd be tempted to preload some gift cards for the various things so as to cut down on the reconciling! I think she downloads the statement but then crosschecks each receipt so as to make sure all is legit (and heaven forbid if I get the receipts out of order in my wallet, oh boy do I get in trouble).

 

[JohnG]

Quote
I also like keeping the two, if anyone wipes out one account the other should still be around, after all we don't use our debit cards for anything. At least in theory the savings account might be safe...


There is a problem with this theory. It's called Overdraft Protection. My sister fell victim to this about 10 years ago. The Toll collection agency for the FL Turnpike (Sunpass, I think it was) had some bad actors on the payroll. They had ALL of your personal information, including a credit card. Sis only put enough money on that card to cover small purchases, but had overdraft protection on the account.
When the scammers bought the $1200.00 TV with the stolen card number, the money came right out of savings!

Be careful!

 

[JohnG]

Quote
It's one thing if you need the money. But if you don't dividends just means you have to pay taxes on your growth. With growth funds, they typically don't pay dividends and the growth is in the stock price. So you don't end up paying taxes on it until you sell which allows you to grow your portfolio faster.


I guess I forgot to mention that this was AFTER my retirement. Yes, I pay taxes on the money, but don't mind that a bit. I've paid taxes my entire life.
This portion of income only represents part of my annual income. And I have a two year income "cushion" on the sweep fund, so I don't need to react quickly.

I lived in a different time when you could see monthly gains on your 401K that were sometimes $10,000/mo. I don't expect to see that ever again from the market.

If I wanted to avoid paying taxes, I'd convert to a ROTH or do like my neighbor did and buy Municipal Bonds. He tells stories of tearing off the little paper tabs every month and cashing them in...actual certificates! Imagine that!

 

[Wolf359]

Originally Posted by JohnG
I guess I forgot to mention that this was AFTER my retirement. Yes, I pay taxes on the money, but don't mind that a bit. I've paid taxes my entire life.
This portion of income only represents part of my annual income. And I have a two year income "cushion" on the sweep fund, so I don't need to react quickly.

I lived in a different time when you could see monthly gains on your 401K that were sometimes $10,000/mo. I don't expect to see that ever again from the market.

If I wanted to avoid paying taxes, I'd convert to a ROTH or do like my neighbor did and buy Municipal Bonds. He tells stories of tearing off the little paper tabs every month and cashing them in...actual certificates! Imagine that!


There's nothing wrong with paying taxes, it just that doing so lowers your total returns. To me, investing is about the return. Focusing on dividend stocks just means you're giving up on stocks that may not offer a dividend but offer a higher return.

As for those 10k gains, well it all depends on how much you have in there... And it goes both way, 10k+ gains and losses. After a bad day or a good day in the market, it makes it seem like what you did during the day was peanuts.

 

[alarmguy]

The only words you need to know = Alliant Credit Union for your everyday banking and savings. Then of course whatever else you invest is up to you.
With Alliant you get interest in your checking and of course higher interest in your savings. Never any fees.
I like the Discover ads I get too, good rate on savings (about the same as Alliant) BUT nothing on checking it seems and/or better said, no hoops to jump through with Alliant.

Its all online and simple to set up and bank using an app on your phone or your computer.

 

[dareo]

Inflation and low bank rates force us into stock.

Lowest risk, i suggest buying O , the highest quality reit on the market with a 5-6% yield at recent prices and pays monthly.

For moderate risk im buying pipeline oil stocks like MMP and HEP, paying around 10% based on distributing petroleum products and not so much a barrel price.

Higher risk, shopping mall reits like MAC SKT SPG provide, at the moment, high yields.