Now that the space people are all caught up with the rest of you earthlings we are ready to move forward and start exploring how to manage this money thing that you keep hearing so much about.
So you've acquired a stash of cash. What are you going to do with it?
"I'm just a simple person." You may say to yourself. "I'm just going to hide all my money under my mattress. What could go wrong?"
Well for one thing there could be a horrible mattress fire. Then where would you be? Hmmm? Don't discount the ever present danger of the insidious silver fish. They will swim into those stacks and eat them up. Yes microscopic money eating monsters do exist. I saw it on Breaking Bad. Perhaps the biggest risk to your money is inflation. If you aren't earning interest on that money it is slowly losing purchasing power over time. As a rule of thumb most economists assume an inflation rate of 3%. That means that on average the prices of goods and services is going up by 3% every year. If the amount of dollars you have remains the same, but all of the prices increase than you can't buy as much as you could before said increase.
A savings account is a way for you to protect that sweaty mattress money. They are great for storing money in a liquid format, but they aren't as convenient to access as a checking account. Most people use savings accounts as an emergency fund, or to save up for a large purchase like a car or a vacation. Many people like having an account where they can hide some money away and pretend they don't have it. If you leave it in the checking account you will find something to spend it on. More on checking accounts in the next post.
If you are still dubious allow me to assuage your anxiety with the following Q and A session. It's OK, I knew what you were going to ask so I'm just going to do your half of the conversation also. You're welcome.
Q: What if the bank gets robbed and the money I deposited gets stolen? Can I still get the same amount of money from the bank?
A: Yes you can. They will just give you money from a different stack that they kept somewhere else.
Q: What if someone uses my account without my permission? Can I still get the money back?
A: If money is ever stolen from your account due to an unauthorized transaction you have the right to dispute the transaction in order to recover the stolen funds. Most banks have a zero liability policy for fraudulent transactions
Q: What if the bank goes out of business? Could I still get my money back then?
A: Up to a point. The Federal Deposit Insurance Corporation (FDIC) insures you up to $250,000 per financial institution.
Q: What if I had more than $250,000 deposited with a bank? I would just lose it?
A: In the unlikely event that the bank went out of business and the even more unlikely event that you had more than $250,000 deposited in a single financial institution then yes I suppose that it is theoretically possible to lose the money. However, if you really had $250,000 just lying around you should probably be investing some of that money in non FDIC insured investments anyway.
Q: Good point.
A: Please phrase your question in the form of a question.
Q: Are there any fees?
A: You bet your sweet ham hocks there are fees. Most fees can be avoided as long as certain conditions are met. Ask your financial institution for more details on your specific account.
Q: I recognize that you're giving me good advice, but I'm also really lazy. Can't you just tell me what all of the fees are?
A: While I can't tell you about the specific fees on your account I will write future posts about typical fees. Any stipulations or amounts are for entertainment purposes only and should not be assumed to be true of your particular account. Read the account disclosure you gob nobbing sloth person.
Well that's all the time we have for today beloved readers. Join us next time for a chat about checking accounts.
No comments:
Post a Comment