Feb

8

Where to Save ones Money?

February 8, 2010 |

The Federal Reserve and the Banks are keeping Americans from being able to save. I recently got a “act quick” from Ameritrade. If I put $25,000 into a CD I could get 2.2%. Whoah, where do I sign-up.

Current savings rates for accounts under $10,000 are between 1.2 and 1.4%.

Inflation is currently over 5%. Putting your money into a savings account at these rates is not really an option. Given the volitility of the stock market I would not recommend putting your money there unless you have time to pay very close attention to it (which I have been doing, and it has been a fair amount of work.)

What are you supposed to do?

Well, if you have credit card debt start paying it off. With interest rates at outrageous levels (even for folks with good credit) paying off this debt is really a good investment.

Pay down your mortgage. Make payments towards the principle. Doing this can save you a ton of money.

Think about creating a pantry with a few months of food staples that you can rotate through. With rising food prices this is not a bad investment at the moment.

You can buy Series I savings bonds which are paying 3.36%.

Keep in mind it is always good to have a few months of living expenses in the bank. Just do not expect to get much of a return on that money.

 


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