The NY Times shared some results of a study released by the University of Michigan about families and their savings:
New research from the University of Michigan finds that while the average savings rate has grown since 2008, the proportion of families who say they have no savings also has grown over the last two years.
In 2011, the report said, 23 percent of families said they had no liquid assets, like savings or checking accounts or certificates of deposit, compared with 19 percent in 2009.
Having an emergency fund can not only be a financially smart move, it can also give you some peace of mind. For those looking to building their savings, finding the right place is a difficult choice. With some many options, they may have a hard time finding the right one for them.
Online Banking Vs Brick and Mortar Banks and Credit Unions
For myself, I’ve found many online banks, such as Capital 360 and Ally offer better rates than many traditional brick and mortar banks. We’ve used online banking and found their customer service to be quite good. I have some relatives, on the other hand, that prefer going into a branch for their banking needs. My mother uses a credit union for her savings and has had great service from them.
What Your Emergency Fund Account Needs
With an emergency fund you need to focus on 3 things:
- Easy access to it in case of emergency – It does you no good to have a high interest rate if you can’t get to it quickly when it’s most needed.
- Safe place to store you money – Whatever you choose, make sure it’s either covered by the FDIC (banks) or NCUA (credit unions).
- A place where it can grow – If you can earn a decent interest rate for your savings while meeting the two previous criteria, then go for it.
If your bank or credit union provides the above, then you should be fine. Don’t get hung up on chasing rates.
Thoughts on Where to Stash Your Savings
I’d like to hear from you about how you handle your finances. Do you prefer online banking for your savings or do you like a physical branch to save? Do you keep your money into certificates of deposits or another type of account?