SavingsTalk.com

big$saver · 10-31-2007, 08:25 PM

I currently have about $7600 in my savings account, and once I reach $10,000 my bank will jump my interest up to approximately %5. Once I hit $10,000 I would then open a second savings account and split the money, and put some into a personal one for vacations and fun stuff, and the rest into my "savings account" However, I am getting advice to keep doing what I am doing. I currently put $1000 into savings, $333 into my Roth, $250 into a mutal fund, and $289 into my Thrift Savings Plan, the military form of a 401K that is not matched by the government. So should I stop putting money into my other accounts, until I hit $10,000, and then slowly build back what I would have been putting in, or just keep the same split that I currently have? Thanks in Advanced Wrnglrsnmtns I currently have about $7600 in my savings account, and once I reach $10,000 my bank will jump my interest up to approximately %5. Once I hit $10,000 I would then open a second savings account and split the money, and put some into a personal one for vacations and fun stuff, and the rest into my "savings account" However, I am getting advice to keep doing what I am doing. I currently put $1000 into savings, $333 into my Roth, $250 into a mutal fund, and $289 into my Thrift Savings Plan, the military form of a 401K that is not matched by the government. So should I stop putting money into my other accounts, until I hit $10,000, and then slowly build back what I would have been putting in, or just keep the same split that I currently have? A few more things. I am 30 years old, and my Roth IRA and mutual fund are still pretty new. I have about $9000 combined in both of them.

BOB+ · 10-31-2007, 08:25 PM

It really depends if you need your money at the other 2 accounts. If not, then it will make more $en$e to hit 10k fast due to higher intere$t return. Once you reach 10k, then you can consider building up your other accounts.

Minsk · 10-31-2007, 08:25 PM

Maybe you should think about changing banks for most of your savings account, instead. You can get an on-line account with a $1 minimum that is paying 5.05% with either HSBC ( www.hsbcdirect.com ) or Emigrant Savings ( www.emigrantdirect.com ), or one that is paying 4.5% with ING Direct ( home.ingdirect.com ). These banks all allow you to do on-line transfers between accounts at other banks and your savings account. I keep all but $1000 of my savings in a high yield account like these.

Presumably, your goal for your other investments is to earn something more than 5%, so do not short them just to get a higher return on your savings - it will cost you money in the long run, especially if you can get similar returns elsewhere without meeting a minimum.

Minsk · 10-31-2007, 08:25 PM

I would put more money in the accounts with the highest yield. My money would grow faster. I hear the Military TSP is really good.

avitse1341 · 10-31-2007, 08:25 PM

First, you should be able to get an interest rate around 4.5% either at Emigrant Direct, ING, or even Charles Schwab.

Your savings cushion is great and I would base my decision more on your ability to tolerate risk. Personally, I have my emergency fund in a taxable investment account invested in Altria which pays a 4% dividend. As long as I don't need to make an immediate withdrawl, I am able to collect the same rate of return as the savings account as well as take advantage of the stock's performance. If there is a short term immediate need, i can borrow against the funds (margin) to pay my expenses.

Most people don't have my risk tolerance level so I'd stick with the savings/TSP plan you have.

You are saving the money which is great! Figuring out where to put the money is almost a good problem.

Good luck!

alien · 10-31-2007, 08:25 PM

You're doing fine.
I'd just keep doing what you're doing. You'll have $10,000 in that savings account by the end of summer.

I wouldn't sweat it one bit. The difference between what you are currently doing and trying to quickly get $10K in that savings account might increase your interest by $5. Whoop-de-do!

dotru · 10-31-2007, 08:25 PM

Since life throws curve balls at all of us, I would suggest that you keep doing what you are doing...it's really only about 3 more months anyway until you hit that 10K mark.

Also, I would not split the 10K into 5 and 5 unless you have the banks O.K. first. They will raise your interest if you hit 10K. They may look at the two accounts as separate and not give you the higher rate. Ask first.

A good rule of thumb is 6-8 months of savings. Personally, I would continue with your pattern as you may want a car, a house, or something else that may require some cash that is readily available. This can keep you from acquiring bad debt.

gooner · 10-31-2007, 08:25 PM

You're about to reach the $10000 anyway--backing off your retirement contributions would only get you there a month faster, maybe two. If you did that you'd earn about $50 more in interest this year on your savings. But you'd have $500-$1000 less in your retirement accounts as a result. That money, compounded over the next 30 years, could be worth $17,500 (at 10% ave annual return).

You're 30; you need retirement savings. If anything I'd rachet those up a notch and lower my monthly cash savings. Put your cash savings somewhere and get a better interest rate--that way you can split accounts and earn 5% on ALL your savings. Vanguard prime money market, Fidelity money market, ING direct, emigrant direct...all offer 5% or more with little (or no) minimum balance requirement.

10-31-2007, 08:25 PM	#1 (permalink)
big$saver Piggy Bank Join Date: Jul 2006 Posts: 59 Rep Power: 3	Should I put money in my savings account or in my retirement accounts? I currently have about $7600 in my savings account, and once I reach $10,000 my bank will jump my interest up to approximately %5. Once I hit $10,000 I would then open a second savings account and split the money, and put some into a personal one for vacations and fun stuff, and the rest into my "savings account"<br />However, I am getting advice to keep doing what I am doing. I currently put $1000 into savings, $333 into my Roth, $250 into a mutal fund, and $289 into my Thrift Savings Plan, the military form of a 401K that is not matched by the government. <br /><br />So should I stop putting money into my other accounts, until I hit $10,000, and then slowly build back what I would have been putting in, or just keep the same split that I currently have? <br /><br />Thanks in Advanced<br /><br />Wrnglrsnmtns<br />I currently have about $7600 in my savings account, and once I reach $10,000 my bank will jump my interest up to approximately %5. Once I hit $10,000 I would then open a second savings account and split the money, and put some into a personal one for vacations and fun stuff, and the rest into my "savings account"<br />However, I am getting advice to keep doing what I am doing. I currently put $1000 into savings, $333 into my Roth, $250 into a mutal fund, and $289 into my Thrift Savings Plan, the military form of a 401K that is not matched by the government. <br /><br />So should I stop putting money into my other accounts, until I hit $10,000, and then slowly build back what I would have been putting in, or just keep the same split that I currently have? <br /><br /><br />A few more things. I am 30 years old, and my Roth IRA and mutual fund are still pretty new. I have about $9000 combined in both of them.<br />

10-31-2007, 08:25 PM	#2 (permalink)
BOB+ Piggy Bank Join Date: Jul 2006 Posts: 96 Rep Power: 3	Should I put money in my savings account or in my retirement accounts? It really depends if you need your money at the other 2 accounts. If not, then it will make more $en$e to hit 10k fast due to higher intere$t return. Once you reach 10k, then you can consider building up your other accounts.

10-31-2007, 08:25 PM	#3 (permalink)
Minsk Greenhorn Join Date: Jul 2006 Posts: 16 Rep Power: 0	Should I put money in my savings account or in my retirement accounts? Maybe you should think about changing banks for most of your savings account, instead. You can get an on-line account with a $1 minimum that is paying 5.05% with either HSBC ( www.hsbcdirect.com ) or Emigrant Savings ( www.emigrantdirect.com ), or one that is paying 4.5% with ING Direct ( home.ingdirect.com ). These banks all allow you to do on-line transfers between accounts at other banks and your savings account. I keep all but $1000 of my savings in a high yield account like these. Presumably, your goal for your other investments is to earn something more than 5%, so do not short them just to get a higher return on your savings - it will cost you money in the long run, especially if you can get similar returns elsewhere without meeting a minimum.

10-31-2007, 08:25 PM	#4 (permalink)
Minsk Greenhorn Join Date: Jul 2006 Posts: 16 Rep Power: 0	Should I put money in my savings account or in my retirement accounts? I would put more money in the accounts with the highest yield. My money would grow faster. I hear the Military TSP is really good.

10-31-2007, 08:25 PM	#5 (permalink)
avitse1341 Greenhorn Join Date: Apr 2007 Posts: 17 Rep Power: 0	Should I put money in my savings account or in my retirement accounts? First, you should be able to get an interest rate around 4.5% either at Emigrant Direct, ING, or even Charles Schwab. Your savings cushion is great and I would base my decision more on your ability to tolerate risk. Personally, I have my emergency fund in a taxable investment account invested in Altria which pays a 4% dividend. As long as I don't need to make an immediate withdrawl, I am able to collect the same rate of return as the savings account as well as take advantage of the stock's performance. If there is a short term immediate need, i can borrow against the funds (margin) to pay my expenses. Most people don't have my risk tolerance level so I'd stick with the savings/TSP plan you have. You are saving the money which is great! Figuring out where to put the money is almost a good problem. Good luck!

10-31-2007, 08:25 PM	#6 (permalink)
alien Piggy Bank Join Date: Jul 2006 Posts: 63 Rep Power: 3	Should I put money in my savings account or in my retirement accounts? You're doing fine. I'd just keep doing what you're doing. You'll have $10,000 in that savings account by the end of summer. I wouldn't sweat it one bit. The difference between what you are currently doing and trying to quickly get $10K in that savings account might increase your interest by $5. Whoop-de-do!

10-31-2007, 08:25 PM	#7 (permalink)
dotru Greenhorn Join Date: Jul 2006 Posts: 16 Rep Power: 0	Should I put money in my savings account or in my retirement accounts? Since life throws curve balls at all of us, I would suggest that you keep doing what you are doing...it's really only about 3 more months anyway until you hit that 10K mark. Also, I would not split the 10K into 5 and 5 unless you have the banks O.K. first. They will raise your interest if you hit 10K. They may look at the two accounts as separate and not give you the higher rate. Ask first. A good rule of thumb is 6-8 months of savings. Personally, I would continue with your pattern as you may want a car, a house, or something else that may require some cash that is readily available. This can keep you from acquiring bad debt.

10-31-2007, 08:25 PM	#8 (permalink)
gooner Piggy Bank Join Date: Jul 2006 Posts: 75 Rep Power: 3	Should I put money in my savings account or in my retirement accounts? You're about to reach the $10000 anyway--backing off your retirement contributions would only get you there a month faster, maybe two. If you did that you'd earn about $50 more in interest this year on your savings. But you'd have $500-$1000 less in your retirement accounts as a result. That money, compounded over the next 30 years, could be worth $17,500 (at 10% ave annual return). You're 30; you need retirement savings. If anything I'd rachet those up a notch and lower my monthly cash savings. Put your cash savings somewhere and get a better interest rate--that way you can split accounts and earn 5% on ALL your savings. Vanguard prime money market, Fidelity money market, ING direct, emigrant direct...all offer 5% or more with little (or no) minimum balance requirement.

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