Americans are pumping money into bank accounts at a blistering pace this year, sending deposits to record levels near $10 trillion on escalating fears that the U.S. economy is on the verge of another implosion.
There’s no sign that the flood into checking, savings and money market accounts is slowing down. In the last three months, accounts at U.S. commercial banks have increased $429 billion, or 10%, almost double the increase for all of last year.
There’s one big problem: Banks don’t want your money.
Banks are evil and bank savings accounts are for suckers. Savers (the increased rate of savings is encouraging) would be much better off socking their cash away in CDs or very short term bonds.
FDIC.
I was referencing rate of return not safety.
There’s no safe investment at this time that will yield a “reasonable” rate of return. CD’s are all below 1.5%, even at the 30-year point. The only investment that has a potentially higher yield is municipal bonds; and given how many towns/cities/counties/states are facing bankruptcy, investing in muni’s can be compared to playing roulette -no matter how you place your bets, you’ll eventually go broke.
What I find particularly offensive is that in the “financial advice” columns of local and national newspapers, they assume an annual return of 5+% on investments when discussing retirement planning. There’s never any commitment to what stocks to buy to get that return (“you need to have a ‘balanced’ portfolio”, which is useless when stocks are in a roller-coaster status and *no* sector can be accurately predicted) and the notion that stocks will somehow magically “always provide a positive return *in the long run*” doesn’t help someone who plans to retire in 5-10 years.
I have no answers – my 401(k) has tanked, along with my wife’s pension plan. The best answer is probably to get a job with the US government; one which includes membership in SEIU. If that doesn’t guarantee income for the next 100 years, I don’t know what will…………………