What is wrong with a regular savings account?

[Deleted]

Or they are no longer in style?
My job offers the
"Christmas Savings Club"
"Summer Savings Club"
and the other is "Buying Vacation" time because if you don't use it you get a check back the following January for the time you did not use.

What is wrong with just putting money in your own account or savings account?

[thyme4change]

People need to save "for" something. They can't just save.

[973beachbum]

What is wrong with a plan savings account?


Did you mean plain? If you do then I do have an old passbook type savings account. When I was in the bank last the teller told me it was one of their most popular types of accounts. So maybe people still have them just don't talk about them.

PS I don't keep much in it as it pays basically zero percent.

[Deleted]

Apr 14, 2011 10:24:51 GMT -5 thyme4change said:

People need to save "for" something. They can't just save.

Why not? You save and when something come up you use that money.

And also, do you need to save thru your job. I think they are paying 1.15% which is not bad... but I am thinking if you can save for 50 weeks or so, why not do it on your own?

[Deleted]

I don't know the pitch for savings clubs. I think there was one, but I don't think it is relevant anymore.

[Deleted]

I don't know the pitch for savings clubs. I think there was one, but I don't think it is relevant anymore.

[Deleted]

Apr 14, 2011 10:27:20 GMT -5 973beachbum said:

What is wrong with a plan savings account?


Did you mean plain? If you do then I do have an old passbook type savings account. When I was in the bank last the teller told me it was one of their most popular types of accounts. So maybe people still have them just don't talk about them.

PS I don't keep much in it as it pays basically zero percent.

Sorry yes meant plain.
But it doesn't have to be a passbook savings account, or money market or cd's.

I mean what push people to want to save thru their jobs plan aka Christmas Club / Summer club etc.

Can't you just do it on your own or you really need someone to be taking that money out of your paycheck every week?

[sapphire12]

Some people lack the discipline to save unless there are strings attached. The credit union where I work has a Christmas club Savings Acct. The acct holder can't access the funds until October.

You are correct that there are better interest rates, but the interest doesn't matter, if one can't save.

[thyme4change]

Why not? You save and when something come up you use that money.

I don't know - people can be pretty stupid about some things.

And also, do you need to save thru your job. I think they are paying 1.15% which is not bad... but I am thinking if you can save for 50 weeks or so, why not do it on your own?

1.15% is darn good - can I join! I'm only getting .9% on Emigrant and .03% at Wells Fargo. Ummmm - .03%?! I can bump that up to .35% if I put $50,000 in.

[daisylu]

Apr 14, 2011 10:22:35 GMT -5 TheHaitian said:

Or they are no longer in style?
My job offers the
"Christmas Savings Club"
"Summer Savings Club"
and the other is "Buying Vacation" time because if you don't use it you get a check back the following January for the time you did not use.

What is wrong with just putting money in your own account or savings account?

Some people lack the discipline or the willpower to NOT spend every $. Since these type of accounts usually only allow 1-2 withdraws/year without penalties, it helps take away that urge.

[kimber45]

Can't you just do it on your own or you really need someone to be taking that money out of your paycheck every week?

DH has money a portion of his paycheck direct-deposited to savings each payday. It's just easier that way.

[Deleted]

Apr 14, 2011 10:39:22 GMT -5 kimber45 said:

DH has money a portion of his paycheck direct-deposited to savings each payday. It's just easier that way.

I have that too for our ROTH and Savings but those are own account and make it easier on us (not having to transfer money later on).

I mean accounts that you have with work and you get the payout for it every year or so.

[kimber45]

mean accounts that you have with work and you get the payout for it every year or so.

OK, gotcha. Nope don't have anything like that.

[Tiny]

And also, do you need to save thru your job. I think they are paying 1.15% which is not bad... but I am thinking if you can save for 50 weeks or so, why not do it on your own?

Because, it's been pretty well demonstrated that many people
have a hard time 'paying themselves first' - if $3000 appears in their checking account on payday they may talk themselves out of moving $250 to a savings account. Haven't you read blog after blog post after post of people detailing the ways they have to 'trick' themselves into saving?? Rounding up amounts in their check book? Saving change? Hiding money around the house? Giving money to someone they trust to 'hold it for them'.

I have my paycheck divvied up between 3 accounts (at 3 different financial institutions). When I get paid - my employer deposits fixed amounts into 2 of my accounts and the rest goes to my checking account. What I don't see I don't spend.

[workpublic]

Can't you just do it on your own or you really need someone to be taking that money out of your paycheck every week?

no the majority of the country can't for whatever reasons.

www.bea.gov/newsreleases/national/pi/pinewsrelease.htm

Personal income increased $38.1 billion, or 0.3 percent, and disposable personal income (DPI)
increased $36.0 billion, or 0.3

Personal consumption expenditures (PCE) increased $69.1 billion, or 0.7 percent

research.stlouisfed.org/fred2/series/PSAVERT

www.bestcashcow.com/saving-accounts/online-rates

www.bestcashcow.com/savings-accounts/rates

[Deleted]

I don't have savings taken directly out of my paycheck except for 401K but I essentially do the same thing by having auto-withdrawals from checking for car replacement, ROTH, college accounts...

[Gardening Grandma]

Well back in the days when I was struggling along from one paycheck to the next, I'd keep a small EF in my savings account. Trouble was, "emergencies" always seemed to crop up (took me a while to figure it out).... I joined the credit union's Christmas club and received a welcome check in Nov...

Now my Christmas fund is simply part of my short term expenses fund.... But that was then and this is now....

[qofcc]

I remember using Christmas clubs back in the 80's. Seems like they gave you a gift or something for participating and that was part of the attraction.

[runewell]

1.15% is "darn good"? I'll take my chances in the stock market thanks.

[Bluerobin]

cawiau, the big thing against regular savings accounts was that they didn't pay very much interest. Now no savings vehicle pays much. Generally, "club" accounts save slightly more, so go for one of them. Just don't blow the money when the club period is due. Then, move the money to a CD, or even consider a dividend stock for a higher return. Good Luck.

[Deleted]

Apr 14, 2011 13:47:21 GMT -5 qofcc said:

I remember using Christmas clubs back in the 80's. Seems like they gave you a gift or something for participating and that was part of the attraction.

The Christmas Club we used to have our employer would make the December contribution. I can't remember if it was even in an interest bearing account at all besides that though.

[NomoreDramaQ1015]

I think they are paying 1.15% which is not bad

My savings account interest is 0.05%

I'd be all over the club if they could give me that rate. I can save just fine on my own but if I can save AND get the better interest rate I'd join.

[wodehouse]

dramaqueen, check out the high yield savings accounts available online from American Express Bank, Ally Bank, etc. They are around 1.15% or so

[formerexpat]

Why not? You save and when something come up you use that money.

1) instant gratification

2) uncle sam's tit...from which people like to hang

[Deleted]

Apr 14, 2011 19:53:43 GMT -5 @toughtimes said:

Believe it or not, these clubs are an excellent idea and have helped many people save money. In fact, in the old days, some people took secured loans against their own savings and paid the bank 2% interest to get those reminders to return the money.

I am not saying they are not good because after all you are saving money. I am just wondering why someone would pick that form of savings instead of the regular one.

Like in the Haitian culture they have this thing called "SOLE" where every week you give $100 or so and you get paid. So let's say 100/week and 10 people participate: everyone get paid $1,000 when it's their turn and it goes over 10 weeks. But it has to be with people you trust since if someone get paids the first week, they might decide not to contribute the following 9 weeks.

[mithrin]

Apr 14, 2011 15:21:26 GMT -5 wodehouse said:

dramaqueen, check out the high yield savings accounts available online from American Express Bank, Ally Bank, etc. They are around 1.15% or so

Even better, check your local credit unions for "Rewards Checking Accounts". Not all of them have them, but some do, and the rates can be 3%* or better.

*You do have to jump through some hoops to get the good rate:
--Rate only applies to the first $xx,xxx in the account (limit is usually 10-25K)
--You have to sign up for e-statements
--You need direct deposit each month (some will just require electronic transfer, so can be a DD or a billpay)
--You need to use the Debit Card Y times per month (Y can be 10-15)

I have one with a local credit union paying 3.03% on the first 20K in the account as long as I use the debit card 15 times and use their billpay system. I use the debit card for smaller purchases like lunch so that I'm not giving up too much in credit card rewards.

[Deleted]

Apr 15, 2011 6:13:50 GMT -5 @toughtimes said:

Yes, I have heard of that custom or something similar called, (Phonetic, don't know correct spelling) a "Sou-sou" which some of my coworkers got into years ago for the same purpose. I politely declined since I use periodic savings into a bank account and have no extra cash (I put the money in first, live on the rest).

This is a similar method used to fund Korean businesses. The participants put in money each week which is used to fund a loan and a weekly dinner. A recipient is chosen and it is used to fund a business. The interest-free loans are not defaulted on as it is a matter of personal honor and a cause for shunning by the entire community, as well as a permanent loss of funding opportunity in the future.

Yep my stepdad used those laons for his biusiness, my mom is always trying to get into one and I always say that I am already saving (she keeps on offering every year). My aunt used one to buy a 250K rental house...

There is one starting this october and it is 7K and goes over a year I believe. It is $200 or so a week and has 20 participants. My mom did it last year (ending this october) and been asking me to join.

But I can see it because it is some sort of
- force saving for some (my mom)

- interest free loan for others (my stepdad and aunt, they always want to get paid first. My aunt will not participate in one unless she is the first person to get paid, this way if something goes wrong she already got her money. She got burned before)

- But to me (in I was raised in that culture, did sole since I started getting an allowance , the mother of one of my friends were in charge of it) why not just save, at the end it is the same difference.

[daisylu]

It seems like it is a way to force people to save. A lot of people cannot resist spending money that is "burning a hole in their pocket".