Yes, It Is Possible to Have Too Much Money in a Savings Account, According to New GoBankingRates.com Report

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It’s a problem most Americans would love to have: Too much money in a savings account; however, the latest investigation from leading personal finance website, http://www.GoBankingRates.com, uncovers that depositors who contribute too much cash into their savings account are, in fact, doing themselves a financial injustice. The new investigation explains how Americans can take advantage of four alternative financial products to expand their savings and earn higher yields.

Savings Account

Savings Account

It’s important to always be aware of exactly how much money you’re squirreling away, so you maximize your deposit protections by diversifying where you keep your savings.

Go Banking Rates’ recent investigation into the benefits of saving money in a savings account reveals that while saving money in a general account is a smart move, over-saving causes a severe disservice to consumers’ long-term financial goals. The new report explains that federal insurance protection is capped at $250,000 total for all deposit balances in each bank or credit union. For instance, combined balances in savings accounts, checking accounts and certificates of deposit from the same institution must be at $250,000 or less to be fully protected, particularly in the event of a bank failure.

“It’s important to always be aware of exactly how much money you’re squirreling away, so you maximize your deposit protections by diversifying where you keep your savings” says Jennifer Calonia of Go Banking Rates. She adds, “With over 50 failed financial institutions in 2012 alone, consumers need to keep a pulse on how close they teeter to the FDIC and NCUA insurance limits. If they’re close to the maximum protection, they should take a step back and determine what their long-term goals are.”

The report identifies four strategic types of savings account options that bring depositors the savings results they are looking for.

“For example, if you’re concerned with long-term savings, you may be better off opening an individual retirement account (IRA) that offers a generous contribution limit at $5,500, in addition to higher deposit rates,” Ms. Calonia suggests. “If your priority is to save enough money for your child’s future college tuition costs, consider growing their college fund through a 529 savings account plan, which offers tax benefits and competitive rates,” she adds.

To read the entire report, click here.

For questions about this report or to schedule an interview with a Go Banking Rates editor, please use the contact information below.

About Go Banking Rates

GoBankingRates.com is a national website dedicated to connecting readers with the best interest rates on financial services nationwide, as well as informative personal finance content, news and tools. Go Banking Rates collects interest rate information from more than 4,000 U.S. banks and credit unions, making it the only online rates aggregator with the ability to provide the most comprehensive and authentic local interest rate information.

Contact:

Jaime Catmull, Director of Public Relations
GoBankingRates.com
JaimeC(at)GoBankingRates(dot)com
310.297.9233 x261

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