Name: Is the Savings Account Dead?
Uploaded: 2022-07-11T09:31:52.000Z
Duration: 8 min 21 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

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Hey hon, what's this tiny deposit in our savings account?

The return on this puppy is 16 times the national average.

We even had to qualify for this special account type.

But it takes money to make money, am I right?

- I thought this was how we planned to pay for our next car.

By my math, we'll hit our goal in about 140 years.

and our great, great, great grandchildren can use it

to get a certified pre-owned teleporter instead.

- Finding a high yield place to park your money these days

kinda makes me feel like I'm back in middle school,

I see ads all the time for accounts promising high yields,

But as soon as I start sorting through the clues

the query seems to slip through my fingers.

Whether it's a money market account, CD, savings bond,

or even the old faithful savings account,

finding one that pays 1/2 a percent is a struggle.

And if you do track halfway decent one down,

like only for a certain amount of deposits,

- See, once upon a time safe, secure deposits at a bank

you could purchase a six-month certificate of deposit

See, banks were paying higher interest rates, yes,

but they were also charging higher interest rates too.

The average rate on a 30 year fixed mortgage in 1985

was a jaw-dropping 11.85%. (people groaning)

- When you deposit your paycheck at a bank,

like a CD or savings account, it doesn't just sit there.

Thanks to a practice called Federal Reserve Banking,

bans can actually lend out 90% of your deposit, and they do

any amount they charge above what they pay you

the 1985 savings account and mortgage rate?

- So if the difference between bank deposits and bank loans

why does it matter what your investment pays?

The amount of interest you earn on bank deposits

the cost of goods and services increases at the same time.

would pay you about 8%, and the prices of fanny packs,

and bottles of New Coke were increasing by about 3%.

- This is what economists call your real return,

might be bugging you about setting up your savings account.

Investments like savings bonds, and even savings accounts,

you're looking at a negative real return.

Suddenly things like savings accounts and CDs

- Now, before we get to what you've gotta do

let's spare a moment for the humble savings account.

Should you just toss the safe money investment of yesteryear

in the dumpster, along with those old CD ROMs

Savings accounts, CDs, money market accounts

aren't really a place to grow your money,

and likely won't be for the foreseeable future.

- But these accounts are the perfect place

to stash funds you expect to need in the short term,

money to pay bills, your emergency fund or cash

for a major purchase are perfectly suited.

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Is the Savings Account Dead?

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