Hello Penny Hoarders,
I’ve been reading on the different types of savings account available and wanted to take a moment to say what I personally think is the best option because there is so much information out there! I believe that the best vehicle for saving money is an Online (high yield) Savings Account. These accounts offer anything at/above 2%. Personally, I use Marcus by Goldman Sachs which offers 2.15% but Wealth front also has a very good savings account which offers 2.5%
The best part about using an Online Savings Account is that the rate of return is guaranteed. This can be a great way to hedge against a potential drop in the stop market. Even if the stock market falls 20% in the next year, your money in the Online Savings Account will still go up by the guaranteed rate of return. This allows you to build an emergency account that grows every year so that you can invest money with a peace of mind.
What do you think of these savings tools?
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@antonio.bonton Agreed! These are such great options available now in the market. Ally bank is another great option – also over 2%. I just finally cut ties with Bank of America after banking with them since I started my first job…and it feels very good! 
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@theodora that’s great! Ally is a really good one too. Do you save to invest or just to build your savings account in general?
It is good to see banks finally starting to raise the interest rates, but even 2% is okay at best.
At the rate of inflation, most of that interest is lost by the next year due to inflation.
That being said, for saving money short term, it is still better to get 2% for it rather than getting a fraction of that which most bank accounts offer.
Some other banks that pay higher than most are Aspiration and Haven Money.
For long term savings, I prefer to put it into a Real Estate Trust (I use Rich Uncles) which offers a steady rate of return on my money.
I have also been testing out the Worthy app which gives you 5% to loan your money to businesses, so far it has worked well for me.
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I agree, 2% is honestly barely (at best) pacing inflation! But I think it is okay when you are using it for an emergency fund or a purchase within the next year or 2 because you could risk losing it in the stock market (short term) or getting basically nothing in a checking account.
I use saving to have a nest egg for emergencies and short term purchases (house and car down payment) the rest of my savings money goes into the stock market where I can get a return closer to 10%!
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