Saving In the Current Economic Crisis
Posted by admin in EconomyFeb 15th, 2009 | Comments Off
There has been a huge shake up in the banking systems on both sides of the Atlantic and this has affected the value of people’s savings. When you have a severe economic down turn then interest rates start sliding, this is great news if you have something with a variable rate of interest because the company is duty bound to pass that saving onto you.
When Northern Rock went down in the UK and the British Government had to bail the company out to the tune of billions of dollars, people were waiting to draw their money out of the bank in case it got swallowed up in the bank’s debt. Government input has meant that people did not lose their savings, but the interest rate that they receive has been drastically reduced.
The best time to save money is when the economy is good because that is when savers receive higher rates of interest on their money. At the moment interest rates have tumbled and many people who would normally live off the interest on their savings, are no longer able to do this. Not being able to access savings because you have invested in an account that will not come to fruition for a number of years, can be worrying if the institution that is holding your money goes into melt down mode. If you only have a small amount of savings then you might be just as well off with a post office savings books as you are with a bank account.
Savings Accounts
Posted by admin in Savings AccountsJan 1st, 2009 | Comments OffMany parents will take out a savings account for their child as soon as he or she is born. Over the years most parents will add to that money where they can and as the child gets older, they may also decide to save money gifts that they receive for Christmases and birthdays. Some savings accounts pay a much higher rate of interest than others, this is largely due to one of two things, either a person is bound to pay in a specified sum every month or they agree not to draw the money out of their account until an agreed time span is passed.
Many financial experts say that out of all the money that you earn, you should pay yourself first, i.e. you should put away ten or twenty percent of your salary every month. Savings soon mount up and as the amount of money that is in your account rises, so does the amount of interest that you receive. Some savings account systems are set up in such a way that they benefit those who are better off at the expense of some of the poorer members of society. It is always worth saving because you never know when you will have a large unexpected item – being able to pay for things out of your own savings is much better than borrowing on a credit card or from a finance company.
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