Americans are still able to make money, but they can’t or won’t save it, statistics show.
A fairly recent Washington Post article was titled “Does America have a savings crisis?” The conclusion the writer reached was that, yes, we do indeed have a savings crisis. For example . . .
“If faced with an unexpected $400 expense, 4 in 10 adults said they would not have the money to cover it. . . . To get the funds, they would have to sell something or borrow.” That $400 would cover just one small car-repair bill, which will inevitably happen at some point. And let’s not even think about medical emergencies and doctor/hospital bills.
“There was a time,” the writer continued, “in the 1970s when the savings rate in the United States was in the double digits. But the most recent figures from the U.S. Bureau of Labor Statistics put it at 6 percent, the lowest level since the 2008 financial crisis. The drop is part of a 60-year downward trend in the personal savings rate.”
Almost a third (32%) of Americans have absolutely nothing in savings.
Well over half (58%) have less than $1,000 in savings.
Less than a quarter of Americans have more than $1,000 in savings.
Yet the experts say we should, and we all know that we need to save some money for life’s inevitable emergencies and financial crises. Maybe we would if we had a little more incentive.
TYPICAL LOW INTEREST RATES
One huge obstacle to making any real effort at saving is the typical low interest rates banks and credit unions, and other financial institutions offer on savings accounts.
There’s just not much incentive to save.
My bank, for example, has an APY (or annual percentage yield) of just slightly more than half a percent, 0.55%. (I won’t name the bank, but it’s that one with many branches and affiliated with the huge discount chain headquartered in Arkansas.)
Half a percent is pitiful enough, but it gets much worse.
Wells Fargo Platinum offers an APY of 0.05%.
For Bank of America, the standard savings interest rate is 0.03%.
The standard savings rate for U.S. Bank is a measly 0.01%.
That’s very little return for letting a bank hold your money and use it to make money for themselves – a lot actually. There is now an alternative, though.
It’s one that will make more money for you the easy way – one that will pay you more than 2% on your savings. That’s almost 20 times the national average savings rate!
WHY SAVINGS INTEREST RATES ARE SO LOW
Brick-and-mortar banks aren’t necessarily cheapskates or trying to cheat you out of your due. It’s just that they have an enormous amount of overhead. And that has to be paid for somehow.
All those buildings at the various branches cost hugely to build, and then they have to be heated and cooled and maintained. Then there is the cost of ATMs and the tellers’ and officers’ salaries. And all that paper they use – that costs plenty too.
So the banks pay for these things by paying you very little interest on your savings.
A totally online bank, however, wouldn’t have all that overhead, would it? Still, there’s more to it than overhead expenses.
Many of us first started trying to save a little money when we began making some money as teens at our first job. And most of us just stuck the money in savings without looking at the interest yield. We were told we needed to save, and so we did. All of us are also averse to change, so we just stuck with the bank we started out with long ago.
The banks, then, have no real incentive to raise their rates. They know that many customers will stay with them because they have grown comfortable with the situation. They are counting on that inherent human inertia.
But it does pay to shop. And it can pay big over the long haul.
EASY WAYS TO MAKE MONEY
Now there’s VARO – an all-mobile, online bank that helps you save and make money with higher savings interest rates.
VARO offers an APY of 2.12% on smaller savings accounts. You can even open an account with just one penny and begin making money. And with larger savings accounts of up to $50,000, you can get an impressive 2.8%. (You do have to meet a couple of other criteria for the higher rate.)
Now that’s a huge increase over what brick-and-mortar banks typically pay – one that makes saving worth the effort, which will help you make money the easy way.
With your VARO savings account, you’ll get . . .
A VARO Visa Debit Card
Ability to connect to PayPal and other transaction conduits
In addition, like any other bank, VARO is regulated and, FDIC insured up to $250,000. Your privacy and data safety are insured with their encryption, access control, secure processes, and audits. And they also offer free checking if you want that. In fact, VARO charges no fees for anything.
AT VARO, they believe you should get a high yield on your savings without having to pay a dime. They are able to accomplish this because VARO is all mobile – so no brick-and-mortar branches, no overhead, and no laughable savings interest rates.
With high-yield savings accounts like VARO offers, you’ll have more liquid assets at your disposal to invest in other ways. You’ll also have money readily available and easily accessible on your mobile device to buy the things you need when the need arises – and, of course, without a fee.