Thursday, February 25, 2010

Only 1% Interest On Our Savings?

As I was looking at my interest the other day, I wondered why it was so little. I called the bank to find out and was told my e-savings account is now only earning 1%. Immediately I thought about my dad and how he had all his money in a savings account only earning 1% interest. He was adamant about not tying his money up for a long period of time so I told him about the short-term options available at Dollar Bank and eventually convinced him to let me put some of his savings into a rising interest CD for a year so he could at least get more than 1% interest.

That's why I decided to check at the bank to see if there was a better place for my savings that would earn more. When I opened my e-savings, I was getting 5% interest on it. Funny, they don't tell their customers that better options are available. Anyhow, they did have a new account that gives 2% for 90 days and after 90 days they advised me to switch it to a free money account which would at least be a little more than just 1%. Both my husband and I had to physically go to the bank to sign papers to change it and couldn't just do it on the phone or online.

If you haven't checked out different options at your bank recently, you may want to just to see if you could be getting a bit more with your savings account. My dad did not want to have to fuss with remembering when CDs came due and have to make decisions all the time about what to do with his money. He did, however, let me handle it for him his last year or two. I wish banks would just give their customers the highest interest possible on their savings without making them monitor it constantly and investigate what all the different options are. It seems sometimes that there are unwritten rules of procedure somewhere that tell companies they are not allowed to make things simple for the customers.

I can certainly understand why my dad didn't want to fuss with switching his accounts all the time and moving money in and out of different CDs. He just didn't think it was worth the hassle. I think banks hope people will take that attitude so they don't have to pay as much interest. What do you think?

My dad taught me early about banking by giving us a little extra as interest if we put part of our allowance in his "bank." I didn't trust banks and mentioned that I didn't see why anyone would put money in a bank so he wanted to teach me the value of doing that. I also had a real savings account as a kid and when I got birthday money from relatives, some of it went into my savings. I think parents should teach their children about saving. When dad died and I had to clear out his house, I was very thankful that he was one who did not have money secretly hidden all over the place. It made things a little easier knowing that I knew where all his money was.

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Anonymous said...

Banks get me, too.
Once when I noticed a big drop in interest, I asked about it and was told they gave me a special rate for some reason. So I asked for and got it again, but then some time later it dropped again. Why do I have to keep asking for it.
And the paltry interest on checking, why bother? Costs more to process it.
I'm here from Mama Kat's. I'll be back.

Homestay Mama said...

That's why I don't put my money in a savings account--except for a little emergency account that would be quick to get if I needed it. I prefer mutual funds which generally pay a healthier interest rate.

Mrs4444 said...

I wish I had money to put in a savings account.

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T-rexy said...

Quite an interesting post and thank goodness you decided to investigate other options! You've definitely made me think I should do the same.

Thanks for stopping by my blog! I think it's really really admirable that you sponsor a child there- you have my ultimate respect.

Also, if you are interested in things like interest, banking, etc, I think you might enjoy This American Life's series on the industry and the crash. If you've never heard the show, it airs on Sundays on NPR and makes all their subjects funny, interesting, and accessible. Here's the link:

Jude said...

I'm not big on banks, but ours did tell us we need to come in every couple years just to see how they can readjust our accounts and help us. I'm sorry that I haven't gotten around to reading your book yet, but I will soon....Take care.

"My Funny Dad, Harry" Book Giveaway

Congratulations to all the winners of the giveaway for "My Funny Dad, Harry" at Red Pine Mountain. I am so happy that four of my regular commenters won! Read what Tim thought of it at Everyday Living.