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Financial Planning Tip May

May 2020

The U.S. savings rate shot up to its highest level in 39 years. That’s not too surprising since consumers have very few options for spending these days. If you are looking for somewhere to stash some cash, you may be confronted with disappointingly low rates of interest at your bank. Savings accounts are paying less than a tenth of one percent (0.09%) and a 5-year CD will require you to lock your money away for 5 years and give you only 1.3% right now.

Stocks will offer the highest returns in the long run, but unavoidable ups and downs make them a poor choice if you expect to spend that cash within the next few years. Fortunately, high-yield savings accounts are still paying decent rates and offer immediate access to your money. There is no minimum balance requirement. A few options we recommend:

American Express Savings : 1.5%

Ally Bank: 1.5%

Discover: 1.4%

Capital One 1.5%

All these companies need your money to make loans to their customers and they are willing to pay more right now because they value this type of reliable funding. They are FDIC insured up to $250,000 per depositor.

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