Save Money, But Not At Your Bank

Save Money, But Not At Your Bank


Consumers who want to save their future, are in a bind these days. Hammered by the stock market, seeing the financial crisis eat into their savings, and still wanting to save without losing money, lots of people are sitting out of the market until things improve. Yet, saving for the future shouldn’t be curtailed, but what if you are risk adverse?Piggybank

One way that consumers are saving money is by depending on their banks again. Yes, local branches of big commercial banks, community banks, and other savings institutions are in fashion again. But, most savings rates are downright dismal, meaning you’ll lose a bunch of money over the long haul due to inflation.

Looking Beyond The Big Commercial Bank

There are some ways you can make more money from your regular old savings account, but you may need to look beyond your big box bank in order to do that. The following are some tips to help you build wealth slowly, a temporary diversion for some of your funds while the financial markets mend:

Credit Unions — In most cases it pays to look beyond your bank and head over to your local credit union to see what they have to offer. Once you confirm eligibility, you can join up for a small fee and reap the benefits of shared ownership in an entity that really looks after your good. Check out their various savings plans and you’ll see that rates are higher, usually much higher, than what First National Bank offers.

Online Institutions — Banks will a strong online presence, such as ING Direct, pay interest rates that are several times the rate your brick ‘n mortar bank offers. How can they do this? By keeping their overhead low, that’s how. Rates vary, but 3.5% on savings is common with certificates of deposit paying out as high as 5%.

Community Banks — The smaller the bank, the better the interest rate offered. Well, that isn’t always true, but many of the smaller banks operating in your community are not beholden to shareholders or have a minimal overhead and can afford to pay higher rates on your savings account. Check out Top 50 Money Market Rates and High Interest Savings Accounts to find a great rate available to you.

Finally, check with your current bank to see what “specials” they may be offering. You may be surprised to find that your big banker is craving deposit money and is offering a special rate on a CD or a savings account.

Define Your Savings Goals

Identify what you are looking to accomplish with your savings plan. First define your short-term savings goals such as:

— holiday gifts
— new entertainment center
— upcoming education expenses
— next summer’s vacation
— other

And then define your long-term goals:

— buying your first or second home
— saving for your child’s education
— planning retirement
— paying down debt
— other

For each goal, estimate the cost and the amount of time you need to achieve your goal. The list will be used to prepare your savings plan which you can create online.


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Categories: Consumer Tips

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".