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Is a savings account worth it anymore?
Rates are low and the amount of interest I earn is equal to a fancy latte at Starbucks every month. I have an Ally account. Then I recently found out that I could withdraw money that I put into my Roth IRA with no penalty too. It all got me thinking maybe move all my money to the Roth and only keep my checking account (pays 0.1%) for bills. Is this idea totally off? I don't foresee needing to dip into my money and I already have a portion in very conservative investments in my Roth, so I can tap into that portion fairly quickly if I needed it. Is this idea just off?
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It's not an off idea! I don't have a savings account and I hold about a month’s worth of expenses in my checking account. Everything else is invested. No savings account will keep up with inflation, so you're effectively losing money on savings right now.
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A
@Vasiliki476 It's a great idea to keep a month of expenses in your checking instead, thanks for this.
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I
In my case it is worth it because I want to buy a home within the next 2 years. It's also my personal preference to have savings that I can access today if I needed it for an emergency. You could have cash in your brokerage account but likely it is a money market fund that has a much lower interest rate than current savings rates and takes at least 2 days to access if you needed it.
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J
@Ivana725 This is pretty much my case too. I'm one of those who needs an established emergency fund in an HYSA so for me it's worth it. But agree with OP that it's case by case
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I think they are worth it still. First reason being you get FDIC insured up to $250,000. If your bank or CU goes bankrupt, the government guarantees you’ll get your money back. Second reason is that rates will go up at some point again!
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A
@Seema877 Hadn't thought of the FDIC aspect which is valid.
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S
Gotta go with what you think is the right decision for you. Having a savings account helps me sleep better at night. Can't beat the security of it. Yes rates are low but it's something.
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